CJEU Acknowledges PSD2 Ancillary Services Exemption In New Payment Services Ruling

July 2026 – In its judgement of 16 July 2026 in Case C-51/25, Betaal Garant Nederland CV v De Nederlandsche Bank NV, the Court of Justice of the European Union ("CJEU") provided important guidance on the scope of regulated payment services under the Second Payment Services Directive ("PSD2").

The CJEU held that a service whereby an intermediary receives customer funds, holds those funds in its own bank account, and releases them to a contractor only upon the customer's authorisation does not constitute a regulated payment service and, in particular, does not qualify as the execution of a credit transfer within the meaning of Article 4 para 3 in conjunction with Annex I no 3 lit c PSD2.

The judgement confirms an important principle: the mere receipt, holding, and transfer of funds does not automatically trigger a PSD2 licensing requirement. Rather, the decisive factor is whether an entity provides payment services as its principal business activity, including operating payment accounts and executing payment transactions on behalf of users. Payment flows that are merely ancillary to a broader guarantee, escrow, trust, or security arrangement may fall outside PSD2's regulatory perimeter.

The ruling is particularly relevant for businesses operating escrow and platform-based business models and may also influence the interpretation of the forthcoming PSD3 framework.

Summary of the CJEU decision and reasoning

The case concerned a tripartite contractual arrangement used in the construction sector. Betaal Garant provided a security mechanism designed to protect customers from paying for construction works that had not yet been completed or had not been completed satisfactorily.

Under the arrangement, the customer transferred funds to a bank account held by Betaal Garant or an entity acting on its behalf. The funds were retained as security during the project. The contractor received payment only after the customer confirmed satisfactory completion of the works. Absent such confirmation, the funds were not released.

The Court distinguished between the security arrangement itself and the payment transactions occurring within that arrangement.

While the arrangement involved transfers of funds, the CJEU found that Betaal Garant was not itself providing a payment service. The relevant payment transactions were executed through payment accounts maintained with regulated payment service providers, whereas Betaal Garant did not operate payment accounts for customers or provide payment services as an independent commercial activity.

The Court further emphasised that the classification of an activity under PSD2 requires an assessment of the substance of the business model and the economic role performed by the entity concerned. The fact that funds ultimately move between parties is not sufficient, by itself, to bring an arrangement within the scope of PSD2.

Importantly, the judgement confirms that PSD2 is intended to regulate entities whose business is the provision of payment services. Where fund transfers are merely ancillary to a broader commercial service, PSD2 may not apply.

It is to be noted that the judgement leaves the question open whether the activity provided by Betaal Garant might qualify as "money remittance" in the meaning of Annex I no 6 PSD2, instead of a "credit transfer" pursuant to Annex I no 3 lit c PSD2.

What this means in practice

Although the judgement does not establish a blanket exemption for ancillary services, it provides valuable clarification on the limits of PSD2.

The key takeaway is that not every business model involving the handling of funds constitutes a regulated payment service. Supervisory authorities and market participants must assess the actual function performed by the entity and the purpose of the overall arrangement rather than focusing solely on the movement of money.

The decision may have significant implications across the EU, particularly in jurisdictions where supervisory authorities have traditionally adopted a broad interpretation of PSD2, such as Germany.

From an Austrian law perspective, the judgement is consistent with the prevailing view under the Austrian Payment Services Act 2018 (Zahlungsdienstegesetz 2018; ZaDiG 2018), which implements PSD2. The decision supports the position that payment transactions performed merely as an ancillary element of a non-payment-services business do not necessarily trigger licensing requirements under ZaDiG 2018.

However, caution remains warranted. Any exemption must be interpreted narrowly and on a case-by-case basis. Businesses bear the burden of demonstrating that payment flows are genuinely ancillary to their principal business activity. Where an entity in Austria independently handles client funds or executes payments for third parties as a commercial activity, licensing requirements under PSD2 and ZaDiG 2018 may still apply.

Conclusion

For fintech or other platforms, the judgement may be particularly relevant where customer funds are held or released as part of an escrow, safeguarding, marketplace, or conditional-payment arrangement. The CJEU's reasoning suggests that the mere handling of funds does not automatically trigger PSD2 licensing requirements. Instead, the decisive question is whether the platform provides payment services as a standalone commercial activity or whether the payment flow is merely ancillary to a broader commercial service. While the judgement does not create a general exemption for platform models, it provides a stronger basis for arguing that certain escrow and marketplace structures fall outside the regulatory perimeter of PSD2.