Last June, the European Commission unveiled a package of legislative proposals designed to boost the modernization of payment systems in Europe. The primary aim is to strengthen consumer protection and encourage competition in the electronic payments sector, which is crucial to a constantly growing industry that in 2021 recorded electronic payments that reached a value of 240,000 billion euros.
The European financial landscape is undergoing radical change, with the emergence of new players linked to digital technologies, particularly in the field of open banking services. However, this development is accompanied by increasingly sophisticated forms of fraud, compromising consumer confidence. European institutions are mobilizing to introduce appropriate regulations.
On June 28, 2023, the European Commission unveiled a package of measures aimed at adapting Europe’s financial sector to digital transformation while safeguarding consumer interests. These measures include the revision of the Payment Services Directive, transforming the current PSD2 into a PSD3, accompanied by a Payment Services Regulation. The main proposals include:
- fight fraud by enabling payment service providers to share fraud-related information to reinforce consumer vigilance;
- improving consumer protection by making transactions more transparent;
- a level playing field for banks and non-banks;
- improving open banking operations;
- access to cash in stores and ATMs;
- strengthening market harmonization.
The European Commission has also addressed the issue of central bank money. In addition to the proposal to maintain the role of cash, it provides for legislation defining a legal framework for the digital euro. It would coexist with private payment instruments and be distributed by banks and payment service providers. The European Central Bank has welcomed this proposal, stressing the importance of preserving the role of cash.
Electronic invoicing: a competitive challenge
Companies can now make instant payments thanks to open banking. To boost their competitiveness, software and payment service providers can integrate payment by link or QR code into their e-billing solutions. This approach enables supplier invoicing to be accompanied by a means of payment, simplifying the process for customers.
This transition to electronic invoicing, in which software plays a key role, offers companies an opportunity to differentiate themselves. By incorporating instant bank payment solutions, these players contribute to the competitiveness of companies while strengthening their financial resilience. Companies can thus optimize their adaptation to electronic invoicing by adding solutions that enhance their financial agility.
Voting on these texts is scheduled for early 2024, with possible entry into force in 2026. These proposals demonstrate the European Union’s commitment to remaining at the forefront of innovation, while protecting consumer interests and securing transactions in an evolving financial ecosystem.
With PSD3, the catalyst for the digitalization of financial services, approaching, software players have an opportunity to boost their innovation by fully embracing electronic invoicing. This transition provides an opportunity to update IT systems while offering customers a compliant, high-performance e-billing service, strengthening the sector’s competitiveness in an ever-changing landscape.
