EU Tightens Payment Services Rules, Adds Financial Advertising Limits

On November 27, the Council of the European Union (EU) and the European Parliament reached a provisional agreement to strengthen EU legislation on payment services. The new framework introduces tougher anti‑fraud measures, clearer fee transparency, and stronger consumer protections.

The agreement creates a new payment services regulation and updates the existing payment services directive (PSD2). The proposals target rising payment scams, including “spoofing fraud,” where criminals pose as a customer’s payment provider to gain trust and trick them into fraudulent transactions.

Under the new rules, payment service providers (PSPs) must share fraud‑related information and verify that an account’s IBAN matches the account holder’s name before transfers. Providers will be held liable if they fail to use the required preventive tools.

The new framework sets clear restrictions on financial advertising. Major online platforms and search engines may only promote financial services if the provider is duly licensed and authorised in the member state where the ads appear.

In terms of fee transparency, ATM operators must display all fees and exchange rates before a transaction. Card payment facilities providers must clearly disclose charges to merchants.

Retailers will be allowed to offer cash withdrawals without requiring a purchase, capped at €150 per transaction, with chip‑and‑PIN safeguards.

Merchants must ensure their normal trading name matches the name shown on customers’ bank statements to reduce confusion.

The Council and Parliament will continue working on technical details before final adoption.

As reported earlier this month, the EU is considering granting the European Securities and Markets Authority (ESMA) wider powers to directly supervise both cryptocurrency and traditional financial markets.