On 19 July 2024, the European Central Bank (ECB) issued a press release stating that the Eurosystem has defined a harmonised policy to allow non-bank payment service providers (PSPs) to access central bank-operated payment systems, including TARGET. Non-bank PSPs include payment institutions (PIs) and electronic money institutions (EMIs), which are defined under the Payment Services Directive and the Electronic Money Directive, respectively.
The press release adds that starting in April 2025, non-bank PSPs meeting certain requirements will be able to access TARGET, including T2 (for settling payments) and TIPS (for settling instant payments). The requirements will be set out in the TARGET Guideline and will be the same as those that currently apply to credit institutions. The account in a central bank payment system will be limited to include the funds necessary to enable the non-bank PSP to place funds to meet their settlement obligations for the current business day. The maximum balance with be set out in an amendment to the TARGET Guideline.
The press release also notes that the Instant Payments Regulation amended the Payment Services Directive by introducing an option for non-bank PSPs to safeguard users’ funds in an account held with a central bank, subject to the discretion of that central bank. The possibility of safeguarding client funds at the central bank would be additional to the options currently available to non-bank PSPs. The Eurosystem will not provide accounts to non-bank PSPs for safeguarding users’ funds at central banks. A related ECB Decision will follow in due course.