The ECB published a memorandum of understanding on October 16 that sets out how supervisors warn central banks when a payment or e-money institution loses its licence, the missing procedure behind non-bank TIPS access. The EBA and the ECB signed it in November 2025 with 40 national supervisors and central banks across the European Economic Area, and the text was updated in July. It closes a gap the text names directly, where a firm with a withdrawn licence could keep settling in a central bank system, and the account terms around it show why most fintechs will keep paying a bank to hold their money.
Non-bank TIPS access needed a warning line
Since October 6, 2025, payment and e-money institutions have been able to apply for their own accounts in TARGET, including the TIPS instant payment service, under ECB Decision 2025/222. A national central bank grants the account, but the licence and its supervision sit with a national supervisor, often in another country. A Lithuanian e-money firm settling through the Bundesbank would still answer to the Bank of Lithuania.
The memorandum wires those two sides together. A host central bank tells the home supervisor when a firm applies and what it decides. The supervisor flags material breaches of the PSD2 safeguarding, governance and wind-down conditions “without undue delay”, and reports a suspended or withdrawn licence immediately, before or at the moment it updates its public register. Notices go by email on a standard form, or by phone in urgent cases with written confirmation the same working day.
Instant payments leave no time to unwind, which is why the timing matters. A firm that keeps access for a day after losing its licence can keep sending payments nobody can recall, the exposure GL Insight described in its post on real-time fraud. The memorandum also binds nobody. It creates no enforceable obligations, any authority can leave on 30 days of notice, and no Spanish authority appears among the signatories in the published text.
The account terms keep banks in the chain
Direct access is narrower than a bank’s. An ECB presentation to market participants in June 2025 set out the terms: no access to central bank credit, remuneration at the lower of zero and the euro short-term rate minus 20 basis points, and no safeguarding of client funds. Balances are capped at twice the firm’s peak daily outgoing payments over the previous 12 months, with penalties for breaches.
Each condition sends business back to commercial banks. With no intraday credit, a non-bank has to prefund its account, and the cap stops it parking much more than it needs to settle. Client money still has to be safeguarded somewhere else, because the Eurosystem said in 2024 that it will not provide accounts for that purpose. A fintech that settles directly in TIPS still needs a bank for its largest balance.
The ECB expects little change in who participates. The same presentation said non-banks had asked mostly for RTGS accounts and fewer for TIPS, and it estimated that they “will eventually not have a major impact” on participation or traffic. Sponsor banks stand to lose agency settlement fees from the largest payment firms and keep the deposits, the same deposit logic GL Insight traced in the US instant payments market.
Albania is copying the model
The direction runs beyond the EU. The Bank of Albania’s draft rules for its instant payment system, reported on October 6, make payment and e-money institutions direct participants alongside banks. Transfers of up to 500,000 lek must complete within 10 seconds, and lek transfers up to 40,000 carry no fee. Non-banks in Albania asked for direct access after the country transposed PSD2 into its payment services law, the report says.
Inside the euro area, the Eurosystem is opening TIPS on two fronts, to non-banks directly and to tokenised-asset networks through the ledger link in Project Pontes. GL Insight reported that Pontes was due to start its pilot in the third quarter of 2026, and it raises the same question of how much central bank money newcomers may hold.
Bottom line
Non-bank TIPS access now has a working procedure for cutting a firm off, and the account terms, from the credit ban to the holding cap, keep commercial banks in charge of the money fintechs hold for clients. More real-time payments coverage sits on the GL Insight hub.
Watch for:
- The first named payment or e-money institutions with their own TIPS accounts
- Whether Spain’s supervisor and central bank sign the memorandum
- The memorandum’s one-year review, due from November 2026
