PSD3 (Payment Services Directive 3)
PSD3 is the next iteration of the EU's Payment Services Directive, proposed by the European Commission in June 2023 and expected to be finalised and transposed by EU member states over the coming years. It builds on PSD2's open banking framework with several enhancements that directly affect how property companies collect and process payments.
The most significant change for real estate is mandatory Verification of Payee (VoP) — a system that checks whether the recipient's IBAN matches their registered name before a payment is executed. For property companies processing hundreds of transactions monthly (rent payments, security deposit returns, investor distributions), VoP eliminates a common and costly error: payments sent to wrong accounts due to mismatched IBANs and beneficiary names.
PSD3 also introduces stricter API performance requirements for banks, addressing a persistent pain point in open banking. Under PSD2, some banks offered APIs that were slow, unreliable, or functionally limited — forcing payment providers to fall back on screen-scraping methods. PSD3 mandates that bank APIs must perform at least as well as the bank's own customer-facing interfaces, ensuring that open banking payments are fast and reliable.
Additional provisions include stronger protections against authorised push payment (APP) fraud — where a payer is tricked into sending money to a fraudulent account — and clearer rules on liability sharing between banks and payment service providers when fraud occurs.
For property companies, PSD3 means open banking becomes more reliable, more secure, and better suited to high-volume payment operations. Companies already using open banking for rent collection will see fewer failed transactions and faster settlement. Companies still relying on legacy methods face a growing cost gap.