The European Council and Parliament have reached a provisional political agreement to create a new payment services regulation.

The move will see the existing payment services directive (PSD2) amended to create a “modern framework” for payments.

The European Council said that the new rules will be designed to better fight payment fraud, boost transparency on fees, increase consumer protection, and help promote technological innovation in payments.

The regulatory revamp will put in place a comprehensive anti-fraud framework that will help tackle increasingly common new forms of payment scams, such as “spoofing fraud”.

This type of fraud is where fraudsters impersonate a customer's payment service provider to trick the user into carrying out fraudulent financial actions.

Under the new measures, payment service providers (PSPs) will also have to share fraud-related information between themselves.

Payment account IBAN numbers will have to be checked against a corresponding bank account name before any transfer can take place, mirroring the existing process for instant payment transfers taking place in euro.

PSPs will be held liable should if they do not fulfil their obligations to use preventative anti-fraud tools.

The Council also announced that major online platforms and search engines can only advertise financial services to consumers in a given member state if the company providing those services is duly regulated and authorised within that jurisdiction.

“Today’s agreement marks a major step in the fight against payment fraud in the EU,” said Morten Bødskov, Danish minister for business, industry and financial affairs. “And by enhancing consumer protection, improving transparency, and fostering innovation, we are paving the way for a more secure, efficient, and consumer-friendly payment landscape for all Europeans.”

Other rules proposed include a new legal obligation for ATM providers to show users all fees due and exchange rates applied before a transaction can take place.

Similarly, companies providing card payments to merchants will have to make clear the fees they charge for their services.

The regulation also plans to tackle access to cash, particularly for people living in rural areas, by enabling retailers to offer cash withdrawals without a purchase being made.

The Council said to prevent abuse, these withdrawals will require chip and PIN technology, with a maximum withdrawal limit of €150 or equivalent in national currency.

The Council and the European Parliament plan to continue working on the technical elements of the package before final adoption by co-legislators.

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