The European Third-Party Providers Association has called on EU lawmakers to reinforce current laws and elevate Pay by Bank to a more prominent position across the continent.

According to the association, Europe already has the necessary technological infrastructure in place for such a payment system. The Single Euro Payments Area (SEPA), rapid digital banking adoption, and widespread use of instant transfers contribute to this infrastructure. However, what is lacking, as per ETPPA’s officials, is a regulatory environment that promotes its broader adoption.

The rationale behind Pay by Bank

Pay by Bank is an Open Banking solution that allows consumers to make payments directly from their existing bank accounts without the need for additional service sign-ups. Operating via APIs, it offers a decentralized payment method with no single point of failure, which some see as advantageous in terms of reducing systemic risks.

This system could offer a stable alternative if international card networks or digital wallets become too expensive or limit user access for Europeans. For businesses, integrating Pay by Bank would be straightforward through existing providers, providing them with an extra low-cost payment option at the point of sale.

The proposal is linked to ongoing updates to EU regulations such as the Payment Services Directive (PSD3) and the Payment Services Regulation (PSR). The association stresses that finalizing these reforms is essential for removing remaining barriers and creating a European Retail Payments Framework based on Open Banking principles.

ETPPA draws comparisons with India’s Unified Payments Interface and Brazil’s Pix, highlighting their successful domestic adoption. In the UK, government initiatives are also supporting the broader use of Open Banking payments. ETPPA believes Europe should continue leveraging its early regulatory leadership in Open Banking instead of developing new frameworks like the Digital Euro.