Introduction
On 16 July 2026, the Court of Justice of the European Union (First Chamber) delivered its judgment in Case C-51/25, Betaal Garant Nederland CV v De Nederlandsche Bank NV. The case arose as a reference for a preliminary ruling and concerned the interpretation of key provisions of Directive (EU) 2015/2366 on payment services in the internal market, commonly known as PSD2.
At the heart of the dispute was whether a specific type of transaction carried out by an intermediary entity — involving the holding of client funds in a bank account belonging to that intermediary and the subsequent transfer of those funds to a business owner, following the client's authorisation, under a tripartite agreement — constitutes a 'payment service' within the meaning of the Directive, and more specifically a 'credit transfer' as defined therein.
The Court's ruling has significant implications for the classification of intermediary financial arrangements under EU law and for the supervisory reach of national competent authorities such as De Nederlandsche Bank NV, the Dutch central bank and financial supervisor.
Legal framework: key definitions under Directive (EU) 2015/2366
Directive (EU) 2015/2366 establishes the regulatory framework governing payment services in the internal market across the European Union. Two definitions are central to the judgment in Case C-51/25.
Article 4(3) of the Directive provides the definition of a 'payment service'. This provision determines the scope of activities that fall within the regulated perimeter and therefore require authorisation or registration as a payment service provider. The precise boundaries of this definition are critical, as they determine which entities are subject to the supervisory and prudential requirements imposed by the Directive.
Article 4(24) of the Directive defines the concept of a 'credit transfer'. This definition is relevant because credit transfer is one of the specific categories of payment service listed under the Directive, and its scope determines whether a given transaction can be classified as such and thereby attract the full regulatory obligations associated with payment service provision.
The interplay between these two definitions formed the core of the legal question referred to the Court by the national court in the Netherlands.
The transaction at issue: a tripartite intermediary arrangement
The transaction examined by the Court in Case C-51/25 involved an intermediary entity — Betaal Garant Nederland CV — operating under a tripartite agreement. The structure of the arrangement was as follows: client funds were held in a bank account belonging to the intermediary entity itself, and those funds were subsequently transferred to a business owner upon the client's authorisation.
This type of arrangement raises a fundamental question about the nature of the intermediary's role. The intermediary does not simply pass instructions between a payer and a payee in the manner typically associated with a payment institution. Instead, it holds the funds in its own account before onward transfer, creating a distinct legal and operational structure that does not map straightforwardly onto the standard payment service model contemplated by PSD2.
The question referred to the Court was therefore whether such a transaction, characterised by the holding of funds in the intermediary's own account and their subsequent transfer following client authorisation, falls within the definition of a 'payment service' under Article 4(3) and, more specifically, within the definition of a 'credit transfer' under Article 4(24) of Directive (EU) 2015/2366.
The Court's ruling: absence of a payment service
The Court of Justice, sitting as the First Chamber, concluded that the transaction at issue does not constitute a 'payment service' within the meaning of Directive (EU) 2015/2366. This conclusion represents the central holding of the judgment in Case C-51/25.
By reaching this conclusion, the Court drew a clear boundary around the regulatory perimeter established by PSD2. The specific characteristics of the tripartite arrangement — in particular the holding of client funds in the intermediary's own bank account prior to transfer — were determinative in the Court's analysis of whether the transaction could be classified as a payment service or, more specifically, as a credit transfer under the Directive's definitions.
The ruling confirms that not every arrangement involving the movement of funds between parties, even where client authorisation is obtained, will automatically fall within the scope of PSD2. The precise legal and operational structure of the transaction must be assessed against the specific definitions set out in Articles 4(3) and 4(24) of the Directive.
This outcome has direct consequences for the supervisory relationship between Betaal Garant Nederland CV and De Nederlandsche Bank NV, as the classification of the transaction as falling outside the scope of a 'payment service' affects the extent to which the Dutch central bank's supervisory powers under PSD2 apply to the intermediary's activities.
Significance for payment services regulation in the EU
The judgment in Case C-51/25 contributes to the ongoing development of EU case law on the scope of Directive (EU) 2015/2366. By clarifying the boundaries of the concepts of 'payment service' and 'credit transfer', the Court provides guidance to national courts, competent authorities, and market participants across the European Union on how to classify intermediary financial arrangements.
The case illustrates the importance of the precise legal structure of a transaction when assessing its regulatory classification under PSD2. The existence of a tripartite agreement, the holding of funds in the intermediary's own account, and the role of client authorisation are all factors that the Court considered relevant to the classification exercise. Market participants and their legal advisers should therefore pay close attention to the structural features of their arrangements when assessing whether PSD2 obligations apply.
For national supervisory authorities such as De Nederlandsche Bank NV, the judgment defines the limits of their supervisory competence under PSD2 in relation to intermediary entities whose activities do not meet the threshold of a 'payment service' as interpreted by the Court. This has practical implications for the scope of licensing and registration requirements, as well as for ongoing supervisory oversight.
More broadly, the ruling reflects the Court's approach of interpreting the definitions in PSD2 carefully and in accordance with the specific wording and structure of the Directive, rather than extending the regulatory perimeter beyond what the text of the Directive supports.
Conclusion
The judgment of the Court of Justice of the European Union in Case C-51/25, Betaal Garant Nederland CV v De Nederlandsche Bank NV, delivered on 16 July 2026, provides an authoritative interpretation of the concepts of 'payment service' under Article 4(3) and 'credit transfer' under Article 4(24) of Directive (EU) 2015/2366. The Court held that a transaction carried out by an intermediary entity under a tripartite agreement, consisting in the holding of client funds in the intermediary's own bank account and the transfer of those funds to a business owner following client authorisation, does not constitute a 'payment service' within the meaning of PSD2.
This ruling has important consequences for the classification of intermediary financial arrangements under EU law, for the supervisory powers of national competent authorities, and for the obligations of market participants operating in the payment services sector. Entities involved in similar arrangements should carefully assess the structural features of their transactions in light of this judgment and the definitions set out in Directive (EU) 2015/2366.
This article is for educational and informational purposes only and does not constitute legal advice.
Sources consulted
Published by Synojus International
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