The EBA consults on new rules related to the anti-money laundering (AML) and countering the financing of terrorism (CFT) package
On March 6th, 2025, The European Banking Authority (EBA), launched a public consultation on four draft Regulatory Technical Standards (RTS). These technical standards will be central to the EU’s new AML/CFT regime and will shape how institutions and supervisors will comply with their AML/CFT obligations under the new AML/CFT package. The consultation will remain open until June 6th 2025.
The proposed RTSs address the following key areas:
- Direct Supervision by AMLA – the new EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will decide which institutions will be subject to the direct supervision. The EBA suggests a two-step approach: first, identifying institutions with significant cross-border activity; second, applying a harmonised ML/TF risk assessment methodology.
- Institution-Specific Risk Assessment – the determination of the ML/TF risk associated with each institution. The EBA is proposing to put in place a harmonised methodology that all national supervisors will apply when assessing an institution’s inherent risks, the quality of controls and the residual risks that remain after the controls have been applied. This aims to ensure consistency across the EU and reduce the compliance burden, particularly for cross-border institutions.
- Customer Due Diligence Requirements – the extent and quality of information institutions will have to obtain as part of the customer due diligence process under the new AML/CFT regime. Rather than prescribing specific documents, the EBA proposes a principles-based approach, allowing institutions flexibility within the boundaries of the AML regulation.
- Sanctions and Enforcement Criteria – indicators and criteria for determining the level of pecuniary sanctions or taking administrative measures. The objective is to promote consistent, proportionate, and effective enforcement across the EU.
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Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) report on digital wallets
On March 2nd, 2025, The PSR, an economic regulator in the UK, published a report with the FCA including an assessment of digital wallet growth, usage, and competitive landscape in the UK by financial regulators.
The use of digital wallets has rapidly grown in recent years with the proportion of card transactions using a digital wallet increasing significantly from 8% in 2019 to 29% in 2023.
Given the growth, the FCA and PSR engaged extensively with businesses and representative groups to assess the impact of digital wallets, finding significant benefits to consumers through greater convenience, enhanced security measures, and, for some, greater financial inclusion.
concerns were also raised, particularly regarding the need to improve competition among providers and to ease market entry for new players., Addressing these issues could, could expand the range of alternative payment methods on offer, giving consumers more choice.
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PSR: Card Scheme and Processing Market Not Functioning Properly
On March 6th, 2025, The Payment Systems Regulator (PSR), published its final report on the market for card scheme and processing fees, concluding that it is not working well for businesses or consumers..
Cards are essentialto the UK economy, enabling people to pay for goods and services and businesses to accept payments. As a well-established and popular payment method for consumers, cards play a big role in everyday transactions. The PSR found that Mastercard and Visa face weak competitive pressure, allowing them to significantly raise core fees—by over 25% since 2017—without clear cost or innovation justification. This has added at least £170 million in annual costs for businesses.
The PSR’s key findings include:
- Mastercard and Visa are not subject to effective competition in the provision of scheme and processing services.
- Fees have increased substantially in recent years, with no transparency on how they are calculated.
- Mastercard and Visa’s failure to provide sufficiently clear and detailed information on fees creates poor outcomes for acquirers and merchants, in particular by raising their costs and distorting their ability to respond to the schemes’ price signals. often forcing them to absorb or pass on costs
The PSR plans to launch a consultation on potential remedies to address these issues.
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Eurosystem to offer verification of payee service
On March 10th, 2025, the European Central Bank announced the launch of a Verification of Payee (VoP) service to help payment service providers comply with EU regulations and reduce payment fraud by allowing payers to verify recipient account details before initiating transactions.
The VoP service, positively concluded its exploratory work built on solutions developed by Banco de Portugal and Latvijas Banka, will be available across the Single Euro Payments Area (SEPA).
The decision will help PSPs in SEPA to comply with their legal obligations for credit transfers in euro, as outlined in the EU Instant Payments Regulation (Regulation 2024/886).
The introduction of a VoP service is expected to reduce the risk of fraud and payment errors by allowing payers to verify the account details of the intended recipients before payments are initiated. This service will be available for instant payments, including those settled in TARGET Instant Payment Settlement, as well as for SEPA credit transfers.
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