European Regulators Strike Deal to Streamline Data Sharing as Non-Bank PSPs Gain Wider Access to Central Bank Payment Systems

European regulators and central banks have agreed a new framework to smooth information flows that underpin a sensitive shift in the continent’s payments plumbing: widening access for non-bank payment service providers (PSPs) to payment systems operated by central banks.

Under a multilateral Memorandum of Understanding (MoU) signed by the European Banking Authority (EBA), the European Central Bank (ECB), national central banks and national supervisory authorities across the European Economic Area (EEA), authorities will coordinate more closely when a non-bank PSP seeks to join—or is already participating in—central bank-run payment infrastructures. The arrangement is designed to harmonise how supervisors and central banks share relevant information, with the stated goal of achieving consistent supervisory outcomes and a level playing field across the European payments market.

A practical response to a changing payments landscape

Europe’s retail payments ecosystem has rapidly diversified. Beyond traditional banks, a growing share of consumer and merchant transactions is handled by specialised payment institutions and e-money firms that can deliver fast onboarding, user-friendly apps and integrated services for online commerce. Yet the core systems that settle many euro payments—operated by central banks—have historically been more directly aligned with the banking sector.

In this context, the MoU seeks to create a clearer, common operational rhythm between the authorities that license and supervise non-bank PSPs and the central banks that run payment systems and manage participation criteria. While the MoU does not change the underlying legal responsibilities of each institution, it provides an agreed set of principles and standardised processes for exchanging information, including what is shared, when, and through which channels.

Regulators involved in the initiative have signalled that the objective is not simply administrative tidiness. Inconsistent practices among jurisdictions can create uneven outcomes: in one country a non-bank PSP may face a predictable process and timelines, while in another the same type of firm could encounter uncertainty, duplicated requests, or differing expectations. By aligning procedures, authorities aim to reduce friction without weakening safeguards.

What “harmonised information sharing” means in practice

Central bank-operated payment systems are critical infrastructure. Participants can gain direct access to settlement and, in some cases, liquidity arrangements that influence how reliably payments clear—especially during periods of market stress or operational disruption. Because non-bank PSPs are supervised primarily by national supervisory authorities, while central banks control access to their systems, effective oversight depends on both sides having timely, relevant, comparable information.

The MoU sets out a cooperative approach intended to ensure that central banks receive supervisory insights needed to assess and monitor participation risks, while supervisors can draw on central banks’ operational observations about how a PSP behaves inside the system. That can include, for example, information connected to governance, controls, operational resilience, incident history, or other risk indicators that affect safe participation in high-volume payment rails.

Authorities describe the agreement as a way to clarify “who needs to know what,” reducing gaps and avoiding unnecessary duplication for firms. By standardising exchanges, the MoU is also meant to support cross-border consistency—important in the EEA, where many PSPs passport services across multiple countries.

Competition, innovation — and risk management

The EBA has positioned the initiative within its broader push to make retail payments in the EU secure, convenient and competitive. In ongoing regulatory work, the authority develops requirements intended to reduce payment fraud and support consistent authorisation and supervision of PSPs. The same policy direction emphasises competition and innovation—an area where non-bank providers have often been at the forefront, from instant payments user experiences to embedded finance tools for merchants.

However, expanding access to the most systemically important parts of payments infrastructure requires a delicate balance. Central banks must ensure that operational, credit and settlement risks are properly understood and controlled, particularly when the participants are not deposit-taking banks. Supervisors, meanwhile, must retain a clear view of how firms’ risk management holds up under real-world operating conditions inside payment systems.

The MoU reflects a regulatory judgment that better cooperation can help square that circle. Standardised information sharing is intended to support robust decision-making on admission and ongoing participation, while also reducing the scope for divergent national approaches that could distort competition.

A step toward more integrated European payments

The agreement is notable for its breadth: it brings together EU-level and national authorities across the EEA into a single cooperative framework. For market participants, that signals an attempt to make oversight of non-bank participation more predictable, even as the payments market continues to evolve.

Over time, consistent supervisory treatment can influence where fintech and payments firms choose to base operations, how quickly they can scale across borders, and how easily they can compete with incumbent banks. Regulators are betting that a more uniform approach can support innovation while maintaining confidence in the stability of the systems that move money across the region every day.

Why it matters

Direct or supported access to central bank-operated payment systems can lower costs, improve efficiency and reduce reliance on intermediary banks for non-bank PSPs. But it also concentrates operational and settlement risks in critical infrastructure. By aligning information sharing among supervisors and central banks, the new MoU aims to promote competition and innovation in European payments while keeping safeguards consistent across borders.