Jean Guillaume, CEO at Powens, looks at payment initiation services (PIS) and how their performance influences Open Banking’s expansion.
PSD2 gave us Open Banking, but we need to be honest that, for a long time, payment initiation services (PIS) did not look like a business opportunity. Slowly but surely, this is changing. But why?
Bank APIs and payment success rates matter
The logic is simple: payment method reliability equals faster adoption. Why would merchants push a payment method that works 50% of the time when alternatives work at least 80% of the time?
This was PIS. In countries with good bank APIs (e.g., the Nordics and the UK), PIS took off fast. In continental Europe and the markets Powens knows best (France, Spain, Italy), PIS is just now speeding up, as bank APIs improve and Open Banking providers get better at working with them. Despite adoption growing, volumes remain small. The threshold? Once it reaches about 70% success rate, PIS stops being niche; it becomes an alternative method worth considering. For any lower success rate, PIS has specific use cases if nothing else works.
PIS reliability is improving, thanks to several things:
- Big merchants and public authorities started using PIS and told banks, ‘this doesn’t work, do something’. In France, the tax collector administration adopted it last year, following the UK’s example, partly because PIS lets you reconcile payments automatically, which normal wire transfers can’t do.
- European sovereignty discussions raised awareness of native European payment rails, and that the money spent through cards sits with Visa/Mastercard instead of the European economy.
- Banks are changing their stance. If before Open Banking was bad news, another compliance box, some are now hiring Open Banking teams and learning to support it properly.
Pay by Bank conversion matters more than terminology awareness
In the UK, Open Banking payments grew 70% year-on-year, although most people using Pay by Bank don’t know what it is. Honestly, I’m not sure that’s a problem, as usage keeps growing and the experience mimics paying by card: a notification pops up, you approve it, and it’s done.
However, it’s worth comparing PIS with account information services (AIS), which grew much faster. Before PSD2, >50% of people who started the payment journey dropped off, confused by requirements to connect a bank account; now, about 70% complete it, and not because they understand AIS. People just got used to it and saw that it works. Currently, the highest conversion rates (>70%) are in credit applications, where data is used for real-time scoring. People know why they’re sharing their information, so they don’t hesitate. The interface and what we call it don’t truly matter when users see the clear value of a service.
Merchants and PIS use cases: ecommerce or recurring payments?
Merchants have heard every pitch by now, so what convinces them to adopt a payment method is choice. Successful PSPs give merchants access to multiple payment methods, allowing customers to pick. Neither PSPs nor merchants can predict which will win every time, so letting consumers choose their preferred method helps with retention.
However, there are specific use cases where PIS makes sense. It’s a clear upgrade from wire transfers: faster, easier to reconcile, and no new beneficiary to register. Looking forward, bulk and recurring payments are the real opportunity. ERPs and invoicing platforms are closely monitoring PIS, though it is still gated by uneven bank support. Recurring and variable recurring payments (VRPs) could also replace SEPA Direct Debit (SDD), which has a structurally high default rate and requires managing mandates, something PIS embedded from the start.
If I had to pick the strongest use case, it’s recurring billing, especially once PSD3 and the PSR land. Spain’s online lending sector already shows this: lenders combine account-based scoring with card, SDD, and PIS to maximise collection.
What does PIS need to be adopted?
People connect their bank accounts without hesitating for loan applications, so trust isn’t the issue. Card payments keep getting easier, and conversion rates increase each year, so PIS must stand out for its convenience. Why switch when card information is stored, and you can pay with one tap?
Some merchants incentivise customers with cashback for choosing Pay by Bank, funded with the interchange savings. People will use it when it’s beneficial. Powens issues SDD too, and while offering PIS can be seen as cannibalising the business, merchants benefit from having the choice.
PSD3, agentic commerce, and the digital euro: what can PIS do here?
Reliable, secure, and sovereign payment methods will continue to expand. The rise of payment orchestrators, which bundle all the payment methods merchants need for their consumers, illustrates this perfectly.
The SDD comparison is worth repeating: SDD disputes can happen long after the money moved, a risk PIS removes with upfront authorisation. Two areas worth watching, even if still speculative: agentic ecommerce, where PIS could offer built-in fraud protection as AI agents transact, and the digital euro, where it could connect central bank wallets to all European bank accounts using existing payments rails.
While PIS won’t overtake cards, banks, merchants, and PSPs have the data to see where it’s valuable: recurring billing, invoicing, and reconciliation-heavy flows. PSD3 will decide how far PIS goes.
This editorial piece was first published in The Paypers' Account-to-Account Payments Report 2026, which features insights into global trends, technologies, partnerships, and the next phase of the A2A evolution. Access the full report to understand where the A2A payments ecosystem stands today and what’s next.
About the author
Jean Guillaume is the CEO of Powens, bringing over 15 years of experience in financial services. A graduate of France's École Nationale d'Administration, he has worked at the French Treasury, held leadership roles at Groupe BPCE and Fidor France, and founded Xpollens, a fintech specialising in embedded payments. He now leads Powens with both regulatory insight and an entrepreneurial vision for the future of financial data and payments.
About Powens
Powens is a leading European Open Finance platform serving 300+ banks, wealth managers, lenders, fintechs, and accounting software providers across Western Europe and Mexico. Connecting 1,800+ financial institutions, Powens combines financial data aggregation with embedded payment infrastructure – including SEPA payment automation and IBAN issuance – through a single API, helping businesses launch and scale financial services faster.
