Prof. Pim Rank: The transfer of funds by an intermediary – is it a payment service or not?
This column was originally written in Dutch. This is an English translation
A recent ruling by the Court of Justice of the European Union indicates that the receipt and onward transfer by an intermediary of funds from a client to that client’s counterparty does not always constitute a payment service. However, the exact scope of the ruling is unclear.
By Prof. Mr Pim Rank, Solicitor at NautaDutilh in Amsterdam and Professor of Financial Law at Leiden University
To date, Dutch supervisory practice has held that an intermediary who, on a professional or commercial basis, receives funds from users and passes them on to an underlying service provider is providing a payment service within the meaning of PSD2 – more specifically, a credit transfer – and therefore requires authorisation as a payment service provider. This applies, for example, to invoicing by an online platform for products supplied by a third party, or to the billing via a telephone bill for services provided by a third party in the entertainment sector. The question is whether this approach remains tenable following the preliminary ruling of the Court of Justice of the European Union of 16 July 2026 in the Betaal Garant Nederland v DNB case.
Betaal Garant offers private house buyers a security deposit product. Under an agreement between Betaal Garant, the client and the contractor, the client pays part of the contract sum into the current account of a foundation affiliated with Betaal Garant. Once the building contract has been settled to the satisfaction of both the contractor and the client, the amount of the security deposit is paid out to the contractor. In line with existing practice, the supervisory authority, De Nederlandsche Bank (DNB), takes the view that the receipt of funds from the client into the foundation’s account and the transfer of these funds from that account to the contractor’s account must be regarded as a single payment transaction, carried out by Betaal Garant. According to DNB, Betaal Garant is thereby providing a payment service – more specifically, a credit transfer – and should therefore hold a PSD licence. Betaal Garant disagrees with this and is taking legal action against DNB.
On appeal, the Trade and Industry Appeals Tribunal requested the Court of Justice to give a preliminary ruling on whether the receipt, by way of security, and subsequent release of a contractor’s payment constitutes a payment service and, more specifically, a credit transfer as referred to in PSD2. In response, the Court ruled that a service whereby an entity, acting as an intermediary, receives and transfers funds does not constitute a payment service and, more specifically, does not constitute a credit transfer where that entity, under an agreement with a client and a contractor, receives the client’s funds into the current account of an affiliated foundation and subsequently, with the client’s consent, transfers these funds from that current account to the contractor. According to the Court, this does not constitute a transfer because the payment is not made to and from an account held by the client with the intermediary, but to and from an account held by the intermediary with its own payment service provider.
The judgement shows that an intermediary who, on a professional or commercial basis, receives funds from clients and passes them on to an underlying service provider does not, by definition, provide a payment service within the meaning of PSD2. However, it remains unclear whether the ruling also applies to the receipt and onward transfer of funds other than by way of security, and whether a transfer can only be said to have taken place if the intermediary itself offers payment accounts. Perhaps this can still be clarified via PSD3/PSR.