PSD3 and PSR: Europe Turns Open Banking into a Functioning Market

PSD3 and PSR are the next major step in the evolution of Europe’s payments landscape. At first glance, they may appear to be a natural continuation of PSD2. But that is only part of the picture.

If PSD2 was the regulatory experiment that opened access to bank accounts, then PSD3 and PSR are the attempt to transform that experiment into a truly functioning market.

The problem that remained out of focus for too long

PSD2 laid the foundation for open banking and enabled a new category of participants - TPPs - to provide services based on banking data and payments.

But it did not create a market in the full sense of the word.

The issue was not a lack of innovation, but rather the absence of sufficiently stable conditions:

• APIs were often not on par with banks’ own applications

• implementation differed significantly across countries and banks

• access was not always genuinely equal

• there was insufficient economic incentive for scale

As a result, open banking remained in an intermediate zone - used and necessary, but still not fully dominant as a market model.

What the new package changes

With PSD3 and PSR, the European Union is making an important correction.

PSR introduces directly applicable rules across the entire EU - a move designed to reduce fragmentation and create a truly unified market in practice, not just in theory.

PSD3, in turn, strengthens the framework around:

• the quality and reliability of API access

• management of user consent

• fraud prevention mechanisms

• access conditions for third parties

These are not merely technical improvements.

They address PSD2’s core issue: the lack of sufficient predictability, trust, and equal conditions for all participants.

The real shift: economics, not technology

The most important consequence of PSD3 and PSR is not technological, but economic.

The new framework creates conditions for something that until now has developed more slowly than expected:

Mass adoption of account-to-account payments

When access is reliable and standardized, and risk is better managed, direct bank payments begin to make far greater economic sense.

This changes the balance of the market.

For the first time in decades, a real alternative to established card schemes is emerging - a model that does not rely on long chains of intermediaries and fees, but on direct account-to-account connections.

Who benefits from this change

This transformation will favor participants capable of operating as infrastructure, not merely as interfaces.

• Fintech companies with established connectivity and scalable solutions

• Banks ready to become platforms rather than closed systems

• Merchants seeking lower costs and more direct customer relationships

• Software companies aiming to automate financial processes through banking data and direct payments

Conversely, models dependent on high fees and complex intermediary chains will face increasing pressure.

The Southeast European perspective

Interestingly, this transformation may happen faster outside the most mature markets.

Southeast Europe has several structural advantages:

• lower historical dependence on card payments

• high levels of digital banking adoption

• less technological legacy

• strong demand for automation of financial and accounting processes

This allows the region to skip stages and move directly toward models based on account-to-account payments and real-time banking integrations.

Companies such as IRIS Solutions are already building this type of infrastructure, connecting banks through unified APIs and enabling direct payments and secure, regulated access to banking information.

In this context, PSD3 and PSR do not create a new reality from scratch.

They accelerate a transformation that is already underway.

The big question

Regulation alone rarely creates markets.

What it can do is remove barriers, build trust, and create clearer conditions.

PSD3 and PSR do exactly that.

From this point forward, the development of open banking will depend not only on legislators, but on the industry’s ability to build sustainable business models on this foundation.

And this leads to the key question:

Who will turn open banking into a real alternative, rather than merely a regulatory requirement?

PSD2 was the necessary first step.

PSD3 and PSR are the attempt to turn that step into a functioning system.

If this effort succeeds, Europe may build not just a more competitive payments market, but an entirely new financial infrastructure - more efficient, more direct, and less dependent on global intermediaries.

This time, the question is not whether change will happen.

But how quickly - and who will be at its center.

The IRIS Solutions team is ready to help banks, fintech companies, merchants, and software platforms not only comply with the new regulation, but also use it as an opportunity for growth.

If you want to meet the requirements of PSD3 and PSR in a way that creates business value, generates revenue, and delivers competitive advantage - reach out to our team.