---
url: 'https://www.corbado.com/faq/psd3-vs-psd2-differences'
title: 'What is PSD3 and how does it differ from PSD2?'
description: 'PSD3 replaces PSD2, shifting from a directive to a regulation to improve security, consumer protection, and innovation in digital payments.'
lang: 'en'
---

# What is PSD3 and how does it differ from PSD2?

## What is PSD3?

[PSD3](https://www.corbado.com/blog/psd3-psr-passkeys) ([Payment](https://www.corbado.com/passkeys-for-payment) Services Directive 3) is
the upcoming revision of [PSD2](https://www.corbado.com/blog/psd2-passkeys), designed to further enhance
security, innovation, and consumer protection in digital
[payments](https://www.corbado.com/passkeys-for-payment). Unlike [PSD2](https://www.corbado.com/blog/psd2-passkeys),
[PSD3](https://www.corbado.com/blog/psd3-psr-passkeys) will be implemented as a **Payment Services Regulation
(PSR)** rather than a directive, ensuring **uniform enforcement across all EU member
states**.

## Key Differences Between PSD2 and PSD3

### 1. Directive (PSD2) vs. Regulation (PSD3)

- **PSD2** was a directive, meaning EU countries had flexibility in how they incorporated
  it into national laws.
- **PSD3 (PSR)** will be a regulation, which **applies directly and uniformly** across all
  EU countries without local variations.

### 2. Strong Customer Authentication (SCA) Updates

- [PSD2](https://www.corbado.com/blog/psd2-passkeys) introduced **Strong Customer Authentication (SCA)**,
  requiring [two-factor authentication](https://www.corbado.com/blog/passkeys-vs-2fa-security)
  ([2FA](https://www.corbado.com/blog/passkeys-vs-2fa-security)) for most electronic
  [payments](https://www.corbado.com/passkeys-for-payment).
- [PSD3](https://www.corbado.com/blog/psd3-psr-passkeys) aims to refine SCA by:
    - **Clarifying exemptions and risk-based application** of authentication.
    - **Better integration with modern authentication methods**, including **passkeys**
      and **biometric authentication**.
    - Reducing friction in user authentication without compromising security.

### 3. Enhanced Consumer Protection

- **PSD3 introduces stronger consumer rights** for fraud prevention, refund policies, and
  data protection.
- [Payment](https://www.corbado.com/passkeys-for-payment) service providers
  ([PSPs](https://www.corbado.com/blog/payment-provider-passkeys-third-party-sdk)) will have **clearer
  accountability rules** in cases of fraud.

### 4. Leveling the Playing Field for Non-Bank Payment Providers

- PSD3 **improves access for FinTechs and non-bank payment service providers (PSPs)** by
  allowing them **greater access to banking infrastructure**.
- This fosters **more competition** and innovation in digital
  [payments](https://www.corbado.com/passkeys-for-payment).

### 5. Security and Fraud Prevention

- PSD3 strengthens fraud detection mechanisms by mandating **enhanced transaction
  monitoring** and **more rigorous identity verification**.
- It also introduces **clearer guidelines for outsourcing authentication**, allowing
  **third-party authentication providers like passkey services** to integrate more
  effectively.

## How Does PSD3 Impact Passkeys?

While **passkeys** are not explicitly mentioned in current PSD3 drafts, the **regulation's
focus on modern authentication methods and phishing-resistant MFA aligns well with passkey
technology**. The transition to **PSR ensures standardization**, making **passkeys a
strong candidate for compliance with future authentication requirements**.

## Conclusion

PSD3 builds upon PSD2’s foundation but **increases security, eliminates national
inconsistencies, and fosters digital payment innovation**. Organizations preparing for
PSD3 should focus on **phishing-resistant authentication solutions** like **passkeys** to
stay ahead of regulatory changes.

## Read the full article