Digital Euro Exclusion: ETPPA Warns Open Banking Providers Risk Being Shut Out

Quick Summary

The digital euro project risks excluding open banking providers and PISPs from its ecosystem, according to the ETPPA. Current legislative proposals may deny these providers the right to access digital euro accounts, potentially stifling European payment innovation and favoring incumbent banking institutions over independent fintech solutions.

How Does the Digital Euro Threaten Open Banking?

Open banking providers face a significant threat as the European Central Bank (ECB) and EU legislators consider restricting Payment Initiation Service Providers (PISPs) from accessing digital euro accounts. This move contradicts the core principles of PSD2 and PSD3, which mandate non-discriminatory access to payment accounts. By creating a "closed silo," the ECB risks:

• Excluding Pay-by-bank services from the future digital currency landscape.
• Forcing providers into costly commercial agreements just to access baseline account data.
• Reducing consumer payment choice by limiting the digital euro to traditional banking apps.

What Are the Risks of Excluding PISPs?

Restricting access to the digital euro could have far-reaching consequences for European strategic autonomy. If independent fintechs are barred, the ecosystem may become fragmented, inadvertently driving users toward non-European payment solutions like stablecoins or foreign digital wallets. The ETPPA highlights that:

• Innovation will stall if only incumbent gatekeepers control the digital euro interface.
• The SPAA scheme model should be used as a blueprint for voluntary, market-driven participation.
• A level playing field is essential to ensure the digital euro is widely adopted by merchants and consumers alike.

How Can Legislators Protect Payment Sovereignty?

To ensure the digital euro succeeds, the ETPPA advocates for a model where open banking providers maintain their existing rights under the PSD2/PSR framework. This includes standard API access for baseline services without mandatory scheme membership fees. By treating digital euro accounts like any other commercial account, Europe can foster a competitive fintech ecosystem that supports offline functionality and token-based services through voluntary, value-added participation rather than restrictive gatekeeping.

FF NEWS TAKE:

The ETPPA is right to sound the alarm. If the digital euro is allowed to bypass open banking regulations, it sets a dangerous precedent that undermines years of progress in fintech competition. Excluding open banking providers doesn't just hurt startups; it weakens the very European payment innovation the ECB claims to support. To move the needle, the digital euro must be an open platform, not a walled garden for incumbents.