What has Changed

On 27 January 2025, the European Central Bank (ECB) made a landmark shift adopting Decision (ECB/2025/2) granting non-bank payment service providers (NB-PSPs) direct access to its central bank-operated payment systems, including TARGET, SEPA and TIPS.

• This move marks a transformative shift in Europe’s payment services sector, allowing fintech companies, payment institutions, and e-money institutions to engage directly with the Eurosystem’s infrastructure—a privilege previously reserved for traditional banks.
• The change comes as part of the European Union's continued efforts to modernise its financial services landscape, in line with Directive (EU) 2015/2366 on payment services and Regulation (EU) 2024/886 on instant credit transfers in euro.
• The new regulation establishes a clear set of eligibility criteria for NB-PSPs to access the Eurosystem’s payment systems. This includes stringent requirements for IT infrastructure security, cyber resilience, and compliance with national laws governing payment services.
• Furthermore, the ECB emphasises that these NB-PSPs must meet specific conditions regarding settlement accounts, fund holdings, and annual compliance reports.

At the core of this reform is the aim to streamline payment processes, ensure smooth transaction flows, and foster greater inclusion in the European financial system. The ECB’s decision represents a step toward leveling the playing field, enabling fintech firms to compete with traditional banks, which have long dominated access to central bank payment networks.

When will the Decision Apply

The Decision will enter into force on 26 February 2025 and will apply from 9 April 2025.

Implications for Fintechs and Legal Considerations

The introduction of direct access to Eurosystem payment systems for NB-PSPs opens up significant opportunities for the European fintech sector. In particular:

• Non-bank providers can now engage in large-scale payment processing, tapping into the robust infrastructure that facilitates cross-border payments, euro settlement, and real-time money transfers.
• However, this move also introduces a layer of legal complexity. NB-PSPs must navigate strict compliance requirements set out by the ECB, and any non-compliance could result in penalties or the termination of access to the Eurosystem’s payment systems.

This shift is particularly relevant for firms operating in the fast-evolving payments space, especially those seeking to capitalise on the surge in demand for digital financial services.

How Economou & Co LLC Can Assist

As the legal landscape for non-bank payment service providers continues to evolve, Economou & Co LLC provides expert legal guidance to fintech companies including payment institutions and electronic money institutions.