What Links Alfred Hitchcock to Fraud and PSD3?

Alfred Hitchcock, the “Master of Suspense,” built narratives where tension and uncertainty kept audiences on edge, waiting for the eventual resolution. A similar suspense now runs through the financial sector: delays in the European Council’s formal adoption of PSD3, paired with the immediate enactment of PSR, have left businesses anticipating what these regulations will mean in practice.

Like a finely tuned Hitchcock thriller, the industry is navigating unknowns, above all the timeline for full PSD3 implementation, while managing the immediate realities of PSR compliance, which applies upon sign-off.

In this period of heightened uncertainty, advanced technologies and solutions for fraud prevention equip organisations with the tools needed to address evolving risks and regulatory requirements, so they are prepared whenever the curtain finally lifts on the full PSD3 framework.

Navigating PSD3 and Enhancing Risk Management in European Markets

Europe’s payments landscape is undergoing a major shift with PSD3 (Payment Services Directive 3) and the PSR (Payment Services Regulation). Building on the foundation of PSD2, PSD3 targets the growing complexity of digital payments with stronger security, greater transparency, and a more unified framework. For both merchants and financial institutions, these changes represent opportunities to benefit from a safer, more transparent, and innovative environment, while cutting-edge fraud-prevention platforms help organisations meet regulatory demands and strengthen trust.

The Current Status of PSD3 and Immediate Impact of PSR

PSD3 is currently awaiting European Council sign-off before moving toward implementation. As stakeholders across the European Union finalize the new directive, businesses must begin preparing for the transformative shifts it will bring.

Introduced alongside PSD3, the PSR comes into effect immediately upon sign-off, enforcing stricter compliance and operational requirements. This dual-track dynamic makes early action essential: investing in advanced technologies supports immediate PSR readiness and lays a solid foundation for PSD3.

Key Changes from PSD2 to PSD3

Compared with PSD2, PSD3 introduces material updates designed to reduce fraud, increase consistency, and foster innovation:

1. Enhanced Security: Tighter Strong Customer Authentication (SCA) and more proactive fraud-prevention measures.
2. Greater Transparency: Clearer communication of payment terms, fees, and data use.
3. Unified Market Framework: Reduced national disparities and a more consistent compliance baseline across the EU.
4. Support for Innovation: Refined rules for third-party providers (TPPs) to encourage competition and customer-centric solutions.

While PSD2 laid crucial groundwork, PSD3 addresses gaps in enforcement and operational coherence revealed since its rollout. Together, these updates redefine what “compliance readiness” means for financial institutions across Europe, raising expectations for both fraud prevention and operational resilience.

Improvements for Merchants

PSD3 brings a range of benefits for merchants that directly enhance their ability to operate securely and efficiently:

• Reduced Financial and Operational Risk: Enhanced fraud-prevention measures help limit chargebacks, unauthorised payments, and related penalties.
• Increased Business Efficiency: Intelligent scoring and analytics optimise transaction flows and reduce friction, improving convenience.
• Operational Insights for Growth: Real-time analytics and reporting help allocate resources and identify opportunities.
• Support for Expansion: EU-wide compliance foundations ease cross-border operations and market entry.
• Stronger Customer Relationships: Better security and transparency build trust and loyalty.

Improvements for Banks and PSPs

Customers also benefit significantly from the transition to PSD3, with protections that make digital transactions safer and more accessible:

• Increased Security: Advanced fraud-prevention mechanisms protect funds and data throughout the payment process.
• Better Transparency: Clear information on terms and data handling improves confidence.
• Streamlined Authentication: Improved processes reduce friction for legitimate transactions.
• Stronger Rights and Recourse: A greater emphasis on dispute resolution provides faster, fairer outcomes.

Against this backdrop, organisations need practical ways to translate regulatory intent into day-to-day readiness.

From Regulation to Readiness: How RiskShield Addresses PSD3 Compliance

While PSD3 and the PSR open clear opportunities for trust, transparency, and innovation, they also raise the bar for operational and technological readiness. To meet these expectations, organisations need solutions that turn regulatory requirements into tangible fraud-prevention and compliance capabilities - this is where RiskShield comes in.

Designed to amplify fraud detection and ensure regulatory compliance, RiskShield offers an advanced risk management suite that helps businesses across Europe adapt swiftly and securely to the PSD3 framework.

Advanced Fraud Detection and Prevention
RiskShield uses data analytics and machine learning to detect and prevent fraud in real time across channels. This helps organisations meet PSD3 requirements while minimising financial losses and reputational risk.

Seamless Compliance with SCA
RiskShield balances robust deterrence with user experience by identifying low-risk transactions and reducing friction where appropriate, supporting PSD3’s SCA obligations.

Cross-Border Fraud Defense
As PSD3 drives greater harmonisation, RiskShield provides consistent controls across markets, supporting expansion while maintaining compliance.

RiskShield: Enabling Compliance and Sustainability in the European Market

RiskShield’s advanced capabilities help organisations thrive in the regulatory landscape shaped by PSD3 and the PSR. Combining powerful fraud detection, enhanced operational intelligence, and seamless compliance support, RiskShield enables confident, modern payment operations. As PSD3 reshapes European payments and the PSR takes immediate effect, solutions like RiskShield play a pivotal role in building a safer, more transparent, and efficient ecosystem, for businesses and customers alike.

To stay ahead of these developments, INFORM established a dedicated PSD3 Task Force in May 2024 to monitor ongoing changes and share insights with clients and industry stakeholders.

If you would like to explore what PSD3 means for your organisation, and how our fraud-prevention solution RiskShield can support your compliance journey, get in touch with our experts.