Non-Bank Market Access

The first European legislative initiatives on market access by payment service providers (PSPs) were based on the assumption that one had to be a bank in order to be involved in the offering and processing of electronic payments (Payments). Given that the business model of payment institutions (PIs) and electronic money institutions (EMIs) is very different from banks (e.g., PIs and EMIs do not attract repayable funds from the public), a level playing field requires the legal obligations for market entrance by Non-Banks to be proportionate to size and complexity of the Non-Banks’ business model. To establish a level playing field between banks and Non-Banks it is therefore essential to have clear and consistent rules on market access by Non-Banks. With PSD and EMD, the European legislature first provided for such proportionality for Non-Banks by introducing separate licensing regimes for PIs and EMIs. This chapter covers the licence requirements that apply to both PIs and EMIs established in the European Union. In addition, this chapter sets out the condition under which so-called ‘technical service providers’ are allowed to support PSPs with the provision of payment services without requiring a licence themselves.