The revised draft Payment Services Directive (PSD2) received the support of 578 MEPs in a vote on Thursday, with 29 votes against and 52 abstentions.
"The EU payment services market remains fragmented and expensive, costing €130 billion, or over 1% of EU GDP, a year," Italian MEP Antonio Tajani, who is leading on the PSD2 reforms on behalf of the Parliament, said in a statement. "The EU economy cannot afford these costs, if it wants to be globally competitive. The new regulatory framework will reduce costs, improve the security of payments and facilitate the emergence of new players and innovative new mobile and internet payment methods."
The Parliament's vote on the proposals comes after MEPs had previously reached a consensus on the reforms with the Council of Ministers.
The Council must also vote to approve the Directive before it can become law. Out-Law.com reported last month that the Council's vote is likely to take place in mid-November.
PSD2, once finalised, will replace the existing Payment Services Directive which has been in place since 2007. The reforms have been proposed to reflect innovations in the payments market that have emerged in recent times, including the rise of third party payment services and account aggregators. The new regime will impact upon those companies, some of which will previously have gone unregulated.
The main features of the new legislation include new rules on access to payment accounts, the allocation of liability, transparency requirements and customer authentication measures.