As Europe gears up for the implementation of PSD3, it stands on the threshold of a transformative phase in its financial sector. For entrepreneurs, startups, and business owners, understanding and preparing for PSD3 is not only a necessity, it presents an opportunity to unlock growth potential. In this article, I, Violetta Bonenkamp, a serial entrepreneur and strong advocate for innovation, share my analysis of PSD3 and its potential to replicate the UK's open banking success across Europe.
A Crossroads in European Open Banking
The United Kingdom has been a global leader in open banking, achieving unparalleled success in empowering consumers and stimulating innovation. As of July 2025, open banking adoption in the UK has reached a record 15 million users. A key factor behind this achievement has been the central role of the UK government and the Open Banking Implementation Entity (OBIE), which laid the foundation for a unified standard of Application Programming Interfaces (APIs) across banks, facilitated consumer trust, and significantly boosted innovation.
In contrast, Europe’s experience with PSD2, the predecessor of PSD3, has been mired in challenges. While PSD2 opened the door for third-party providers (TPPs) to access customer banking data, its effectiveness was hampered by inconsistent enforcement across different countries, fragmented APIs, and limited collaboration between stakeholders. For startups and entrepreneurs, this has meant higher costs and limited scalability when expanding their services across borders.
With PSD3, the European Commission seeks to address these shortcomings, and for entrepreneurs like us, the stakes couldn’t be higher. Europe is not merely trying to catch up with the UK, it is aspiring to build a broader foundation for open finance, encompassing a wider range of financial products beyond traditional bank accounts.
Key Changes PSD3 Will Bring: What Entrepreneurs Should Know
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Standardized API Framework
PSD3 introduces a harmonized API structure across Europe, lowering the barriers for startups and small businesses to offer cross-border services. This is critical for streamlining integration efforts, something the UK perfected with OBIE’s system. -
Expansion to Open Finance
Open banking will evolve into open finance, allowing access not just to bank accounts but to financial services like loans, insurance, and investments. Imagine a startup leveraging open finance APIs to create a unified dashboard where users can manage everything from auto loans to retirement savings, PSD3 makes this vision tangible. -
Stronger Security Measures
Security concerns have often deterred customers and businesses from fully embracing open banking. PSD3 builds on Strong Customer Authentication (SCA) and will add mechanisms such as mandatory IBAN name checks for credit transfers, enhancing fraud prevention. -
Cost-Effective Cross-Border Transactions
For entrepreneurs operating across Europe, the ability to host seamless cross-border payments under PSD3 will simplify processes and reduce transaction costs. For merchants, this unlocks faster transaction processing, resulting in better cash flows. -
Regulatory Clarity
PSD3 aims to unify and update regulations, converting patchy PSD2 enforcement into a streamlined, pan-European standard. This means fewer legal hassles for businesses expanding their reach beyond their home markets. -
Integration of Cryptocurrency and Instant Payments
PSD3 breaks new ground by incorporating cryptocurrencies and emerging instant payment methods like Buy Now, Pay Later (BNPL) solutions. For startups in the fintech space, this evolution opens the door to innovative business models.
How to Prepare for the PSD3 Revolution
Whether you're an individual entrepreneur or a founder of a startup, preparing for PSD3 involves more than understanding the regulations. Here’s a step-by-step guide to help you leverage the opportunities PSD3 offers:
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Educate Yourself and Your Team
Familiarize yourself with the nuances of PSD3 and the accompanying Payment Services Regulation (PSR). Check out the European Commission's overview of PSD3 and financial data access framework to understand the regulatory specifics. -
Adopt Industry-Standard APIs Early
Collaborate with trusted partners and service providers who offer solutions built around standard APIs to ensure compliance with the harmonized framework PSD3 is expected to implement. -
Invest in Cybersecurity Infrastructure
Strong security isn’t optional. Build robust systems that comply with PSD3's enhanced authentication methods to protect customer data and boost consumer trust. -
Explore Open Finance Use Cases
Think creatively about how your business can leverage data from a broader range of financial services to create innovative products. For example, can your app integrate mortgage or investment data? -
Collaborate with Your Ecosystem
One of the key takeaways from the UK's success is the spirit of collaboration among traditional banks, startups, and regulators. Join open banking working groups or industry initiatives to stay ahead of trends.
Common Mistakes to Avoid
- Overlooking Consumer Trust: A rushed implementation of PSD3 can lead to overlooking usability and transparency, which are key to winning customer confidence.
- Underestimating Compliance Costs: While PSD3 introduces simplification, compliance still requires robust infrastructure and legal expertise. Plan your budget accordingly.
- Slow Adoption: Don’t wait for competitors to innovate first. Being an early adopter of PSD3-compliant technologies can help you carve out your niche in the market.
Why PSD3 Matters for Entrepreneurs
The rollout of PSD3 represents a historic moment to redefine the future of finance in Europe. By prioritizing not just compliance but also the user experience, European startups and businesses have the chance to emulate, and even surpass, the UK's success in open banking. The directive’s vision for open finance expands the playing field, bringing you closer to your customers and helping uncover innovative revenue streams.
For entrepreneurs, staying ahead means adopting PSD3-ready solutions and integrating new financial technologies into existing ecosystems. Adopting early gives you a competitive edge, poised for operational scalability and customer-centric innovation.
Final Thoughts
As an entrepreneur who has navigated regulatory challenges and embraced technological evolution across multiple industries, I see PSD3 as a golden opportunity for European startups and small businesses to compete on a level playing field. The lessons from the UK’s open banking success are clear: regulatory standardization, effective government oversight, and robust collaboration drive meaningful transformation.
Start exploring ways to innovate using PSD3’s provisions, and educate your teams on the upcoming changes. The window for early movers is now, and those ready to leverage open finance will define the next chapter of Europe’s financial evolution. For further insights into PSD3, visit The Rise of Open Banking: PSD2 Paves the Way for PSD3 by Coforge.
The future may be uncertain, but with the right strategy, PSD3 can be the catalyst for your business's success in Europe’s increasingly integrated financial ecosystem. Let’s embrace it together.
FAQ
1. What is PSD3 and why is it important?
PSD3, or the Third Payment Services Directive, is a regulation aimed at harmonizing payment services across the EU, enhancing security, and enabling open finance. It builds on the success of PSD2 while introducing standardized APIs, stronger fraud protection, and expanded data sharing. Read more about PSD3 on Finextra
2. How does PSD3 differ from PSD2?
PSD3 expands the scope of PSD2 by transforming open banking into open finance, addressing inconsistencies with API standards, and introducing enhanced fraud prevention measures such as IBAN name checks for credit transfers. Learn more about the evolution of PSD from Coforge
3. When is PSD3 expected to come into effect?
The EU Council hopes to finalize PSD3 and its accompanying Payment Services Regulation by the end of 2025, with member states expected to transpose the requirements into law within 18 months. Stay updated with insights from PwC Germany
4. How has the UK led the way in open banking?
The UK achieved significant success in open banking by establishing the Open Banking Implementation Entity (OBIE), which standardized APIs, ensured interoperability, and fostered collaboration among fintech companies and banks. Discover more about the UK's leadership in open banking
5. What role does security play in PSD3?
PSD3 focuses heavily on improving security, including mandatory Strong Customer Authentication (SCA) and IBAN name verification for credit transfers to enhance fraud prevention across borders. Learn more about security improvements in PSD3
6. What is open finance, and how does PSD3 contribute to it?
Open finance extends the principles of open banking beyond basic account data access to include financial products such as loans, insurance, and investments. PSD3 fosters innovation by enabling broader financial data sharing. Explore the future of open finance
7. How does PSD3 support cross-border transactions?
PSD3 establishes a harmonized API framework that reduces barriers for seamless cross-border payments, improving cost-effectiveness and transaction speed for merchants and businesses operating across Europe. Understand PSD3 and cross-border payment advantages
8. How can entrepreneurs prepare for PSD3's rollout?
Entrepreneurs can prepare by adopting industry-standard APIs, strengthening cybersecurity measures, exploring open finance use cases, and actively collaborating with stakeholders in the financial ecosystem. Read Violetta Bonenkamp’s step-by-step guide on Relating to PSD3
9. Which countries are covered under PSD3?
PSD3 regulations apply to all European Union member states, as well as additional countries like Iceland and Norway under the European Free Trade Association (EFTA). Learn more about PSD3’s expanded scope
10. How will PSD3 impact fintech innovation?
PSD3 creates a unified regulatory environment that encourages innovation and competition among fintech companies, especially through the integration of instant payments, cryptocurrency, and personalized financial services. Discover key PSD3 impacts from J.P. Morgan
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
