Euro Area Countries Delay TARGET Reform: Missed Deadlines Threaten Economic Progress
The European Central Bank (ECB) has recently made headlines by announcing a significant delay in the amendment of the TARGET Guideline, which impacts non-bank payment service providers (non-bank PSPs) seeking access to the TARGET payment infrastructure. This delay, now pushing the timeline to October 2025, is a critical development in the eurozone’s payment landscape.
Key Details of the TARGET Guideline Amendment Delay
Originally outlined in Decision ECB/2025/2, the amendment was designed to expand TARGET’s participation rights to non-bank PSPs. However, due to sluggish national legislative processes in certain euro area countries, the implementation will now be postponed. The primary issues leading to this delay include:
- Incomplete transposition of essential changes related to the Settlement Finality Directive (SFD) and the Payment Services Directive (PSD2).
- The necessity to ensure that all member states are legally aligned before granting access to non-bank PSPs.
The Role of TARGET in the Eurozone
TARGET, which encompasses both the T2 platform for large-value payments and TIPS for instant retail transactions, is a cornerstone of the EU’s financial infrastructure. The proposed amendment is aimed at fostering a more inclusive and competitive payments ecosystem, allowing licensed non-bank institutions to engage actively in cross-border and instant payment solutions.
Implications of the Delay
The Eurosystem has stressed that this delay is a necessary measure to avoid potential legal uncertainties regarding the eligibility of non-bank PSPs. Premature access could lead to significant regulatory issues for central banks and participating institutions. Here are the key points regarding the implications:
- The postponement serves to prevent legal complications that could arise from inconsistent national regulations.
- National central banks (NCBs) still retain the power to allow non-bank PSPs to access domestic payment systems, provided the necessary legal changes under SFD and PSD2 have been implemented at the national level.
- This flexibility enables countries that have made progress in their legislative processes to continue advancing in payment inclusivity.
Looking Ahead
As the ECB prepares for the revised timeline, stakeholders in the payment industry will be closely monitoring developments in national legislation. The ultimate goal remains to create a seamless and competitive payment environment in the eurozone. For more information on the ECB’s initiatives and updates, visit the European Central Bank’s official website.
Stay tuned for further updates regarding the TARGET Guideline and its impact on non-bank payment service providers in the eurozone.
