The ECB recently published the Eurosystem’s harmonised policy in respect of non-bank PSPs access to central bank operated payments systems and to central bank accounts. This policy laid down the requirements for non-bank PSPs to fulfil in order to directly participate to central bank operated payment systems and specifies that the Eurosystem will only offer settlement accounts dedicated to the settlement of payment operations. The Eurosystem will not therefore offer safeguarding accounts for non-bank PSPs in TARGET nor in other central bank operated payment systems. 

The Eurosystem understands that, from a liquidity perspective, non-bank PSPs may wish to rely on users’ funds for the purposes of settling payment transactions on an intra-day basis. If this is considered in line with the safeguarding requirements in PSD2, and taking into consideration that the Eurosystem will not offer safeguarding accounts for non-bank PSPs,  the provision of guidance by the European Banking Authority (EBA) on how non-bank PSPs would best comply with the safeguarding requirements in PSD2 when using direct access to the central bank operated payment systems for settling payment transactions would be beneficial to ensure a consistent approach.  

To assist in the EBA’s assessment in terms of the potential reliance by non-bank PSPs on users’ funds for settlement of payment activities on an intra-day basis, attention is drawn to a number of factors. Firstly, all accounts in TARGET are held in central bank money, the safest settlement asset. Secondly, the TARGET Guideline does not prevent participants from opening multiple settlement accounts for the purposes of settling payments. This could facilitate separation of funds for reasons of transparency but not for safeguarding purposes (users’ funds vs non-bank PSPs’ own funds), assuming that the EBA would deem it acceptable for non-bank PSPs to rely on users’ funds on an intra-day only basis for the purposes of settling payment transactions. Non-bank PSPs will likely use automated liquidity management functionalities e.g., minimum/maximum balances, standing orders; squaring mechanisms which allow for instance an end-of-day sweep of funds to the non-bank PSP’s safeguarding account held at a commercial bank (i.e., no funds need be held on an overnight basis if not desired). Settlement accounts held by non-bank PSPs in TARGET will be subject to a holding limit irrespective of the use of users’ funds or non-bank PSPs’ own funds; the limit will be based on the non-bank PSPs’ anticipated settlement of retail payment transactions (based on e.g., historical transaction data).   

The amendments to the TARGET Guideline are scheduled to come into effect on 9 April 2025, along with the deadline for the national transposition of the amendment to the SFD. As non-bank PSPs are likely preparing their operational models in the coming months, the consideration by the EBA of the potential use of users’ funds on an intra-day basis to facilitate payment activities could provide an increased liquidity pool for non-bank PSPs in a suitably controlled manner. In this scenario, such funds would not be held in a safeguarding account (i.e. not protected during the business day should the non-bank PSP become insolvent) but could be held in a separate account to prevent comingling of users’ funds with own funds. The Eurosystem will engage with the non-bank PSP industry associations to obtain information that could assist in determining the formula for calculation of the maximum holdings (intra-day and overnight) on settlement accounts in central bank operated payments systems including TARGET. The Eurosystem will also engage with non-bank PSPs on TARGET functionalities in Autumn 2024; feedback from the EBA, i.e. a guidance on suitable measures for non-bank PSPs to comply with the safeguarding requirements under PSD2 when using direct access to the central bank operated payment systems for settling payment transactions, would also be beneficial. 

Recently published Eurosystem harmonised policy is accessible via the below link:

https://www.ecb.europa.eu/paym/target/target-professional-use-documents-links/tips/shared/pdf/Eurosys_pol_on_access_to_central_bank_operated_payment_systems_by_NBPSPs.pdf