The Payment Services Regulation (PSR)


The proposed Payment Services Regulation (PSR)

According to Article 1 (Subject matter) of the proposed Payment Services Regulation (PSR):

1. This Regulation lays down uniform requirements on the provision of payment services and electronic money services, as regards:

(a) the transparency of conditions and information requirements for payment services and electronic money services;

(b) the respective rights and obligations of payment and electronic money service users, and of payment and electronic money service providers in relation to the provision of payment services and electronic money services.


2. Unless specified otherwise, any reference to payment services shall be understood in this Regulation as meaning payment and electronic money services.


3. Unless specified otherwise, any reference to payment service providers shall be understood in this Regulation as meaning payment service providers and electronic money service providers.


According to Article 51 (Limits and blocking of the use of the payment instrument):

1. Where a specific payment instrument is used for the purposes of giving permission, the payer and the payer’s payment service provider may agree on spending limits for payment transactions executed through that payment instrument. Payment service providers shall not unilaterally increase the spending limits agreed with their payment service users.


2. If agreed in the framework contract, the payment service provider may reserve the right to block the payment instrument for objectively justified reasons relating to the security of the payment instrument, the suspicion of unauthorised or fraudulent use of the payment instrument or, in the case of a payment instrument with a credit line, a significantly increased risk that the payer may be unable to fulfil its liability to pay.


3. In such cases the payment service provider shall inform the payer of the blocking of the payment instrument and the reasons for it in an agreed manner, where possible before the payment instrument is blocked and at the latest immediately thereafter, unless providing such information would compromise objectively justified security reasons or is prohibited by other relevant Union or national law.


4. The payment service provider shall unblock the payment instrument or replace it with a new payment instrument once the reasons for blocking no longer exist.


According to Article 81 (Management of operational and security risks):

Payment service providers shall establish a framework with appropriate mitigation measures and control mechanisms to manage operational and security risks relating to the payment services they provide. As part of that framework, payment service providers shall establish and maintain effective incident management procedures, including for the detection and classification of major operational and security incidents.


According to Article 84, Payment fraud risks and trends:

1. Payment service providers shall alert their customers via all appropriate means and media when new forms of payment fraud emerge, taking into account the needs of their most vulnerable groups of customers. Payment service providers shall give their customers clear indications on how to identify fraudulent attempts and warn them as to the necessary actions and precautions to be taken to avoid falling victim of fraudulent actions targeting them. Payment service providers shall inform their customers of where they can report fraudulent actions and rapidly obtain fraud-related information.


2.Payment service providers shall organize at least annually training programmes on payment fraud risks and trends for their employees and shall ensure that their employees are adequately trained to carry out their tasks and responsibilities in accordance with the relevant security policies and procedures to mitigate and manage payment fraud risks.


As acknowledged in the Communication from the Commission on a Retail Payments Strategy for the EU, the good functioning of EU payments markets is of substantial public interest. Therefore, when it is necessary in the context of this Regulation for the provision of payment services and for the compliance with this Regulation, payment service providers and payment system operators should be able to process special categories of personal data as defined in Article 9(1) of Regulation (EU) 2016/679 and Article 10(1) of Regulation (EU) 2018/1725.

Where special categories of personal data are processed, payment service providers and payment system operators should implement appropriate technical and organisational measures to safeguard the fundamental rights and freedoms of natural persons. Those measures should include technical limitations on the re-use of data and the use of state-of-the-art security and privacy-preserving measures, including pseudonymisation, or encryption to ensure compliance with the principles of purpose limitation, data minimisation and storage limitation, as laid down in Regulation (EU) 2016/679.

The payment service providers and payment systems should also implement specific organisation measures, including training on processing such data, limiting access to special categories of data and recording such access.

Regulation (EU) 2023/1114 of 31 May 2023 (Markets in Crypto-Assets Regulation - MiCAR) lays down that electronic-money tokens shall be deemed to be electronic money. Electronic money tokens are therefore included, as electronic money, in the definition of funds in this Regulation.


According to the proposed PSR, fraud in credit transfers is inherently adaptive and comprises an open-ended diversity of practices and techniques, including the stealing of authentication credentials, invoice tampering, and social manipulation. Therefore, to be able to prevent ever new types of fraud, transaction monitoring should be constantly improved, making full use of technology such as artificial intelligence.

Often one payment service provider does not have the full picture about all elements that could lead to timely fraud detection. However, it can be made more effective with a greater amount of information on potentially fraudulent activity stemming from other payment service providers. Therefore, sharing of all relevant information between payment service providers should be possible.

To better detect fraudulent payment transactions and protect their customers, payment services providers should, for the purpose of transaction monitoring, make use of payment fraud data shared by other payment services providers on a multilateral basis such as dedicated IT platforms based on information sharing arrangements.

To improve the protection of payers against fraud in credit transfers, payment service providers should be able to rely on information as comprehensive and up to date as possible, namely by collectively using information concerning unique identifiers, manipulation techniques and other circumstances associated with fraudulent credit transfers identified individually by each payment services provider.


We are expecting the final text of the PSR.


Cyber Risk GmbH, some of our clients