The transition to PSD3 and PSR1 in 2026 introduces mandatory IBAN-Name Matching and shifts fraud liability. Merchants must update their checkout flows to remain compliant and reduce chargeback costs.

The Shift from PSD2 to PSD3

While PSD2 focused on "Open Banking," PSD3 and the Payment Services Regulation (PSR1) focus on Fraud Prevention and Trust. The most significant change for e-commerce merchants is the "Confirmation of Payee" (CoP) requirement across the Eurozone.

Major 2026 Compliance Pillars

1. IBAN-Name Matching

Before a credit transfer is executed, the provider must verify that the recipient's name matches the IBAN. Merchants must ensure their legal entity name matches their banking records exactly to avoid payment friction at checkout.

2. Extended Refund Rights

Consumers now have broader rights to claim refunds for "spoofing" fraud (where a fraudster impersonates a bank or merchant). Merchants using high-security, SCA-compliant gateways are generally protected, but "frictionless" checkouts may face higher liability risks.

3. Smarter Strong Customer Authentication (SCA)

PSD3 simplifies "Merchant Initiated Transactions" (MITs). This allows for easier recurring billing and subscriptions by bypassing repeated SCAs if the initial mandate was robustly authenticated.

Checklist for 2026 Readiness

  • ✅ Verify: Ensure your legal business name matches your IBAN registration.
  • ✅ Update UI: Adjust checkout screens to accommodate "Confirmation of Payee" alerts.
  • ✅ Review API: Check with your payment gateway for PSD3/PSR1 technical compatibility.