Marie Sherlock (Dublin Central, Labour)
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190. To ask the Minister for Finance the status of the proposed payments services EU regulation. [14842/25]

Marie Sherlock (Dublin Central, Labour)
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191. To ask the Minister for Finance the actions that taken to address the legal lacunae of liability relating to authorised push payments fraud; and if he will make a statement on the matter. [14843/25]

Marie Sherlock (Dublin Central, Labour)
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192. To ask the Minister for Finance the consideration that has been given to the introduction of a mandatory redress scheme similar to that in existence in the UK and relating to incidents of authorised push payment fraud. [14844/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 190, 191 and 192 together.

The proposed Payment Services Regulation (PSR) and its accompanying Payment Services Directive (PSD3), which together aim to increase harmonisation in the area of European payments regulation, including in the areas of authorisation and fighting payment fraud, are currently still under negotiation in the European Parliament and Council. In Council, working parties are ongoing under the Polish Presidency of the Council and is working toward an agreed general approach on both the PSR and PSD3.

The European Parliament adopted a first reading of the PSR and PSD3 on 23 April 2024. Once Council reaches a general approach and produces a first reading of both PSD3 and PSR, negotiations will progress to Trilogue stage. Trilogue negotiations are conducted between the Council, Parliament, and Commission with the aim of producing a final agreed text which can be adopted by Council and Parliament. I am not in a position to provide a concrete date by which the proposals will be adopted.

Fighting and addressing fraud is a key element of the draft PSR proposed by the European Commission. This includes the extension of Payment Service Provider (PSP) liability to cases in which the victim is manipulated into authorising a fraudulent payment by a fraudster impersonating the PSP, as well as incorrect application of the matching verification service (IBAN check), and failure to support the application of strong customer authentication. The shifting of liability for such cases onto PSPs aims to incentivise PSPs to develop better solutions to mitigate instances of authorised push payment (APP) fraud. This is a departure from the current Payment Services Directive (PSD2), under which PSPs are liable only for losses which are the result of unauthorised transactions. Liability for APP fraud is being considered in the context of ongoing PSR negotiations.

When agreed, PSD3 and the PSR will build on the foundation of PSD2 and further harmonise the European payment services market. It will be important to have a harmonised, pan-European response to fraud to avoid loopholes and protect consumers across the European union. This is also a cross-sectoral issue and will need to be addressed through a number of initiatives, including financial literacy programmes, engagement from social media and tech companies, and cooperation between industry and regulators in order to protect and inform consumers.

My officials are aware of the UK’s contingent reimbursement model which came into effect in October 2024 and are monitoring it closely. The UK fraud reimbursement model was enabled under the Financial Services and Markets Act 2023 which revoked and amended retained EU law relating to financial services in the UK following the UK’s exit from the European Union. The Act included amendments to the UK instrument, the Payment Services Regulations 2017, which transposed the Payment Services Directive (PSD2). The Act allowed the UK Payment Services Regulator (PSR) to develop a mandatory participation scheme for reimbursement for authorised push payment fraud by amending Regulation 90 of the Payment Services Regulations 2017 beyond the requirements of PSD2. The Bill was granted Royal Assent on Thursday 29 June 2023 and HM Treasury noted that the new powers it contained were available due to the UK’s exit from the European Union.