Europe’s payment sovereignty depends on Pay by Bank – „policymakers must act now” says European TPPs Association

With European leaders citing sovereignty as a key driver for the development of a digital euro, the European trade association of Third Party Providers (ETPPA) is urging policymakers to instead focus on an alternative option – Pay by Bank.

As MEP Aurore Lalucq rightly warned, Europe cannot claim sovereignty while its everyday payments rely on non‐European systems. From our shop counters to our smartphones, foreign‐owned schemes dominate how Europeans pay, even though Europe already has the technology to change that.

„That technology is Pay by Bank – a secure, direct bank payment method powered by open banking APIs. Recent events have again drawn attention to Europe’s dependency on the United States, not just in defence, but in European citizens’ everyday lives.” – said ETPPA, the European trade association of Third Party Providers.

ETPPA statement

While Europe’s banking infrastructure is among the most advanced in the world, with instant transfers, SEPA, and widespread mobile banking, the checkout experience in physical stores remains largely in the hands of international companies. It’s time for Europe to build on genuine home‐grown alternatives.

The European Central Bank’s digital euro project aims to create a public‐sector alternative, but it will take
years and could cost billions in taxpayer funding. Meanwhile, a private‐sector solution already exists: a
European payment method based on open banking technology that connects directly to all of the more
than 400 million EU bank accounts.

Pay by Bank leverages Europe’s modern banking infrastructure for broader reach than any other payment method. It is built on API‐centric technology and, thanks to its decentralised design, has no central system vulnerable to attack. Consumers pay directly through their trusted banking app; merchants benefit from secure, low‐cost, instant payments; and Europe’s banks remain central to the digital economy.

If international payment schemes or wallets were ever restricted or became more costly, Pay by Bank is the one and only ready‐to‐use pan‐European alternative. But to reach its full potential, including use in physical stores, it now needs a final policy push.

The EU’s pioneering work through PSD2 put Europe at the forefront of open banking. Yet others have caught up and overtaken us: India’s UPI, Brazil’s Pix, and even the UK have made Pay by Bank a pillar of their national strategies. Europe risks falling behind unless the upcoming Payment Services Regulation (PSR) fills the last regulatory gaps, enabling Pay by Bank in all environments.

Unlike the digital euro, Pay by Bank is here and ready today – an open, resilient, and scalable system built
from Europe’s own innovation. To secure Europe’s payment sovereignty, resilience, and competitiveness,
policymakers must finish the job and complete the PSR so that home-grown European Pay by Bank solutions can work flawlessly, online as well as in physical stores.

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ETPPA is the European trade association of Third Party Providers (TPPs) under PSD2 and beyond. ETPPA represents the TPP interests vis-à-vis the EU authorities and across various European working and multi-stakeholder groups in support of creating an innovative and competitive level playing field for Account Information and Payment Initiation Service Providers (AISPs & PISPs).