ECB Grants Non-bank PSPs Access to Eurosystem Payment Systems

On January 27, 2025, the European Central Bank (ECB) issued a Decision (ECB/2025/2, not yet published), which governs non-bank payment service providers (NB-PSPs)’ access to central bank-operated payment systems in the eurozone, including the TARGET system. The new guidelines are intended to improve the efficiency of the retail payments sector and set common entry criteria throughout the European Union.

• Under the new rule, NB-PSPs, which include payment institutions and electronic money institutions, will be able to use Eurosystem-operated payment systems. This project aims to improve the functioning of the payment market, notably in terms of quick payments, while also encouraging competition and innovation.
• According to the ECB, NB-PSPs will only be granted access if they meet strict, non-discriminatory, objective, and risk-based standards. These companies must meet stringent security criteria and give statements confirming conformity to national rules based on the PSD2 Directive.
• One of the decision’s significant aspects is the implementation of holding limitations on monies stored by NB-PSPs in central bank-operated payment systems. The maximum authorized amount will be decided based on each NB-PSP’s settlement commitments and historical transaction volume. Exceeding these limits may result in financial fines, and repetitive infractions may lead to exclusion from the payment system.
• The ruling also indicates unequivocally that central banks will not provide safeguarding accounts to NB-PSPs, which are commonly used to protect customer cash. The ECB contends that such accounts might disrupt the financial sector and jeopardize monetary policy transmission.
• NB-PSPs that presently access payment systems indirectly as “reachable parties” in TARGET must shift to direct participation by December 31, 2025. A transition period has been designated to allow these organizations to adjust to the increased technological and operational requirements.

The new rules will take effect on 9 April 2025, aligning with the implementation deadline for changes introduced by Regulation (EU) 2024/886, which sets new standards for instant payments in EUR.