ECB Decision on access by non-bank payment service providers to Eurosystem central bank
ECB Decision on access by non-bank payment service providers to Eurosystem central bank
On the 6th of February 2025, the Official Journal of the EU published Decision (EU) 2025/222 of the European Central Bank, granting non-bank payment service providers (PSPs) access to its settlement systems.
This move aims to increase competition, reduce costs, and enhance transaction speed while maintaining strict limits on fund holdings and regulatory oversight.
In a major policy shift, the ECB’s Governing Council announced that non-bank payment providers such as Paypal, Klarna and Stripe will gain direct access to central bank infrastructure, thus ending the long-standing monopoly held by banks. Effective 9th of April 2025, this decision is expected to increase competition and reshape eurozone payments.
Furthermore, the decision expands the Settlement Finality Directive to include non-bank PSPs, allowing them direct access to central bank payment systems, including Target. Previously limited to banks, this change aims to enhance retail payment efficiency and support instant payments across the euro area. It may also lower costs and accelerate international transfers.
Balancing Innovation and Security
To mitigate systemic risks, the ECB has implemented stringent security and compliance measures for non-bank PSPs, including limits on central bank account holdings. These funds are restricted to settlement obligations, therefore preventing their use as safeguarding accounts. This was previously allowed at the central banks’ discretion. The ECB maintains that Target’s role remains focused on real-time payments.Nonetheless, the ECB confirmed that cryptocurrency platforms will not be granted access to central bank payment systems, leaving them reliant on private banks for transactions. As a result, digital asset exchanges will not be allowed to store customer funds in central bank accounts.