The recent report of the Emerging Payments Association (EPA), which was set up to encourage collaboration and stimulate innovative thinking within the finance ecosystem, examined the second Payment Services Directive (PSD2), pointing out the main issues and concerns. The six articles included in the report, written by industry’s leaders, give valuable feedback with regards to the upcoming update (PSD3) of the existing regulations. It is necessary to say that Payment Service Providers (PSPs) have been expressing their dissatisfaction and inability to keep up with the constantly changing legislation for a while now. This has called for a need to reexamine the regulation issues and modify them to better suit the needs and capabilities of the payment industry participants.

Going back to the report, it attempts to look further into the future of the payments industry, emphasizing the necessity of change before PSD3 is implemented. Modulr, fscom, Moorwand, Okay, Northey Point, Locke Lord and Kemp Little are acting are representatives of the EPA, giving their vision on the evolution of payments regulation. Below are the main topics addressed in the report:

1. Should the UK adopt a PSD3 or chart its own course?
2. Pulling the plug on e-money
3. Safeguarding the customers’ money
4. Unlocking Strong Customer Authentication (SCA)
5. Changing the focus of open banking risk for data
6. Education: the ‘secret sauce’ for the successful implementation of payments regulation

PSD2 continues to remain in the final phases of its implementation, which makes it the perfect timing to consider the necessary future updates and revisions. The payment services market must continue to grow and develop, adhering to the best practices but also taking into consideration the needs and opinions of the industry’s main participants.

The articles included in the report put forward the opinions of industry’s leaders in order to facilitate discussion on the relevant issues that is expected to result into beneficial change. There are many issues to consider, including the framing of the regulation in a way that it fits the needs and expectations of clients and service providers.
The Director General of the EPA has states that ‘This white paper will help to shape the future of payments regulation,’ adding that the changes will be visible in the nearest five years.

In a nutshell, it is clear that the white paper has become a catalyst of a debate around payments regulation. The EPA along with the Financial Conduct Authority (FCA) will continue to present issues and concerns, collaborating towards the enhancement of the payment services market.