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The European Banking Authority (EBA) has ruled out payments and e-money firms being able to use their new access to central bank settlement accounts to meet safeguarding compliance requirements.
In a newly published Q&A, the regulator has confirmed that non-bank payment service providers (PSPs) cannot treat balances held in central bank-operated settlement accounts as meeting safeguarding requirements under the second Payment Services Directive (PSD2), unless those accounts are explicitly designated for safeguarding purposes.
The EBA has clarified that where a central bank does not offer safeguarding accounts, “keeping funds as referred to in Article 10(1) PSD2 on a settlement account with the payment system after the end of the business day following the day when the funds have been received, cannot be considered by itself a safeguarding measure in accordance with Article 10(1) of PSD2”.
The clarification addresses growing uncertainty among payment institutions and e-money institutions preparing to use central bank-operated payment systems, such as TARGET, for the settlement of retail payment transactions.
The need for designated safeguarding accounts
The European Central Bank’s (ECB's) new harmonised policy, which took effect in April 2025, allows non-bank PSPs to hold dedicated settlement accounts, but explicitly rules out providing safeguarding accounts.
“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,” the submitter, who is anonymous, says.
They added that if this is to be considered in line with the safeguarding requirements in PSD2, “taking into consideration that the Eurosystem will not offer safeguarding accounts for non-bank PSPs”, guidance from the EBA would be helpful.
The questioner specifically wanted to know how non-bank PSPs can best comply with the safeguarding requirements in PSD2 when using direct access to the central bank-operated payment systems for settling payment transactions.
In its response, the EBA reiterated that non-bank PSPs remain responsible for choosing a compliant safeguarding method, whether segregation of customer funds in a separate account at a credit institution or eligible central bank, insurance or a comparable guarantee.
Thus, settlement accounts that are not designated safeguarding accounts do not meet these criteria.
The ECB’s policy also imposes holding limits based on anticipated transaction volumes and enables automated liquidity tools, such as intra-day sweeps, to help PSPs manage end-of-day compliance.
However, the EBA stressed that these features do not change the legal requirements under PSD2.
