As of October 2025, non-bank payment service providers (PSPs), specifically Payment Institutions and Electronic Money Institutions, can become direct participants in key European payment systems such as T2, TIPS, RT1 and STEP2-T. This development also paves the way for direct participation in SEPA-compliant Clearing and Settlement Mechanisms (CSMs). It represents an important event in the evolution of the EU payments landscape, creating a more level playing field between banks and non-bank PSPs.
A regulatory milestone
This shift has been made possible by the EU’s updated Instant Payments Regulation, which introduced amendments to the Settlement Finality Directive and the Second Payment Services Directive. These changes remove long-standing barriers that previously prevented non-bank PSPs from accessing core payment infrastructures directly. With the final updates to TARGET’s contractual conditions now implemented across all Eurosystem jurisdictions, non-bank PSPs are officially eligible for direct operational access.
Strategic opportunities for non-bank PSPs
Direct access to payment systems offers several strategic opportunities for non-bank PSPs:
- Operational independence: PSPs can now manage their payment flows relying less on intermediary banks, gaining more control over transaction processing and liquidity.
- Cost efficiency: Eliminating intermediary fees improves margins and allows for more flexible pricing strategies.
- First-mover advantage: Early adopters can position themselves at the forefront of the evolving payments landscape.
These benefits are especially valuable in a market that increasingly prioritizes speed, transparency, and cost-efficiency. However, it's important to note that accounts held in designated payment systems are intended solely for placing funds to meet settlement obligations, not for safeguarding customer funds. A maximum holding limit applies, and as such the balance on such accounts should not exceed what is necessary to fulfill settlement obligations. This requirement does not affect the advantages of direct access, but it does call for careful liquidity planning.
New responsibilities and challenges
While the opportunities are significant, direct access also introduces new responsibilities and challenges. PSPs must be prepared to meet the operational, technical, and regulatory demands that come with direct participation:
- Liquidity management: Real-time systems like T2 and TIPS require robust intraday liquidity management and contingency planning.
- Technology and operations: PSPs must invest in secure connectivity, real-time processing capabilities, and compliance with technical requirements.
- Regulatory approvals: Central banks assess applicants based on strict criteria, including operational readiness and appropriate risk management processes.
- Value-chain coordination: Seamless integration across the payment value chain, from customer interfaces to settlement, is essential.
These challenges highlight the need for thorough preparation and expert guidance to ensure a smooth transition.
Projective Group: supporting your transition
At Projective Group, we help non-bank PSPs turn regulatory change into a strategic opportunity. Our tailored services support institutions throughout their journey to direct access to designated payment systems and SEPA CSMs:
- Readiness assessments: We evaluate your current position across liquidity, compliance, technology, and operations to identify gaps and opportunities.
- Business-case validation: We help you determine the most suitable form of direct participation for your business model and strategic goals.
- Supplier selection: We help you select optimal CSM(s) and define the best approach for connecting directly to T2/TIPS.
- End-to-end support: From initial design and stakeholder alignment to central bank approvals, roadmap creation and implementation up to go-live, we guide you every step of the way.
Our team combines deep regulatory expertise with hands-on experience in payments transformation. We understand the technical and regulatory complexities of direct access and help PSPs navigate them with confidence.
Are you ready to participate directly?
The regulatory door is now open. Non-bank PSPs that act early can gain a competitive edge, reduce costs, and accelerate innovation. But success requires more than ambition: it demands preparation, expertise, and execution.
Projective Group is here to help. Whether you're exploring direct access for the first time or preparing for implementation, our experts are ready to support you.
