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Payments and e-money institutions have come a step closer to gaining access to central bank payment systems in the Eurozone, after the European Central Bank (ECB) outlined its policy for the regulatory change.
It is not necessarily a surprise for the EU’s fintech industry, but the ECB has announced the opening of access to Eurosystem-operated payment systems, including TARGET, to non-bank payment service providers (PSPs), such as payment institutions and electronic money institutions.
This move, which takes effect on April 9, 2025, is designed to improve competition and innovation in the Eurozone’s payments sector, although the ECB maintains strict regulatory oversight.
Gaining access
To gain access, firms must meet tough requirements, including IT security standards, compliance certifications and regular reporting obligations.
They must also submit annual statements confirming adherence to cybersecurity and regulatory conditions.
However, despite granting access to central bank systems, the ECB has ruled out the provision of safeguarding accounts, meaning firms need to continue relying on commercial banks to hold customer funds separately from their own.
This has sparked irritation among both lobbyists and the European Commission.
In November 2025, Eric Ducolombier, one of the key civil servants overseeing payments policy, remarked that “one option could have been — I’m not judging — could have been a more case-by-case approach looking at the merits”.
In October, EU payments and fintech lobbyists, including the Electronic Money Association (EMA) and European Fintech Association (EFA), had urged the ECB to reconsider its Eurosystem access policy for non-bank payment firms.
In an open letter to Christine Lagarde and other ECB leaders, they warned that the policy could stifle competition and increase costs.
The groups’ concerns include the ban on safeguarding funds with Eurosystem central banks and the exclusion of settlement funds from safeguarded status, and they proposed a measured approach to balance financial stability with market access.
Holding limits
A central element of the ECB’s framework is the introduction of holding limits on central bank accounts.
These measures are intended to prevent excessive liquidity accumulation and ensure that funds held in these accounts do not disrupt financial stability.
Under Article 4 of the policy document, the ECB also imposes restrictions on the amount of funds that a firm can hold at the end of each business day in any central bank-operated payment system.
This applies to all TARGET accounts, including:
- The Main Cash Account (MCA), which is the primary account for processing payments and managing liquidity.
- The RTGS Dedicated Cash Account (RTGS DCA), used for real-time gross settlement (RTGS) transactions.
- The TIPS Dedicated Cash Account (TIPS DCA), which facilitates instant payment settlements.
The maximum holding amount is determined based on historical or projected transaction volumes, the ECB said.
Firms with at least 12 months of operating history will have a holding limit set at twice the highest daily outgoing cash transfer value (excluding liquidity transfers) recorded over the past 12 months.
Firms with less than 12 months of history will have their limit based on twice the expected peak daily outgoing cash transfer value.
Future plans
During the first 12 months of operation, the Eurosystem central bank will recalculate the holding limit monthly for the first three months, then quarterly for the remainder of the year.
After the first year, the limit will be reviewed annually, based on the actual highest daily outgoing cash transfer value.
Should a firm experience a significant increase or decrease in transaction volumes, the central bank may adjust the limit immediately to maintain compliance.
If a firm exceeds its maximum holding amount, it must take immediate action to reduce the balance to below the limit. If the breach is due to a late incoming payment, the correction must happen as soon as possible on the next business day.
Repeated or significant breaches of this will result in financial penalties, potentially leading to account closure, the ECB said.
Meanwhile, firms participating in ancillary systems, such as securities settlement or retail payment systems, that rely on RTGS AS Settlement Procedure D or TIPS AS Settlement Procedures are required to submit monthly reports to the Eurosystem central bank.
These must detail peak and average overnight holdings on TARGET ancillary system technical accounts, as well as peak and average daily settlement obligations in the corresponding ancillary system.
The ECB has committed to reviewing these provisions regularly, and the list of eligible accounts will be reviewed one year after implementation, and every three years thereafter.
The method for calculating the maximum holding amount will also be assessed within one year and every three years to reflect market conditions.
