The European Third-Party Providers Association has urged EU policymakers to support existing legislation and help bring Pay by Bank into the spotlight in Europe.
The association argues that the European Union already possesses the technological foundations for such a system. With the Single Euro Payments Area (SEPA), instant transfers and widespread digital banking adoption, the infrastructure for direct account-to-account payments is largely in place. What remains, according to ETPPA officials, is a regulatory framework that encourages its uptake at scale.
The case for Pay by Bank
The proposal focuses on ‘Pay by Bank,’ an Open Banking method enabling consumers to pay merchants directly from their existing current accounts. Unlike card schemes or wallets, it does not require signing up for additional services and operates through application programming interfaces (APIs). Its decentralised structure is also seen as reducing systemic vulnerabilities, since there is no single point of failure.
ETPPA notes that this model could provide continuity if international card networks or wallet providers raised costs or limited access for European users. For merchants, integration would be possible via their current providers, offering an additional low-cost option at the point of sale.
The association further links Pay by Bank to the ongoing revision of the EU’s Payment Services Directive (PSD3) and the Payment Services Regulation (PSR). Officials argue that finalising these reforms is critical to removing remaining barriers and enabling a European Retail Payments Framework (ERPF) based on Open Banking.
Comparisons are drawn with India’s Unified Payments Interface and Brazil’s Pix, which have both achieved significant adoption domestically. In the UK, government initiatives are also supporting wider use of Open Banking payments. ETPPA maintains that Europe should build on its early regulatory leadership in Open Banking rather than introducing entirely new frameworks such as the Digital Euro.
