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On 16 July 2026, the Court of Justice of the European Union (“CJEU”), in Case C-51/25 (“Betaal Garant Nederland”), ruled that a Dutch construction-sector guarantee provider did not require authorisation as a payment service provider under Payment Services Directive (“PSD2”). The decision, while not expected to have a significant impact on the scope of activities which fall under PSD2, has the potential to influence how key concepts are interpreted under the forthcoming PSD3 regime.
Executive summary
Despite the potential for the CJEU to recalibrate the scope of a “payment service” under PSD2, the CJEU’s judgment is confined to the fact-specific nature of the legal framework surrounding the Dutch guarantee service provider. The CJEU in Betaal Garant Nederland held that the transfer of funds by a Dutch construction sector guarantee provider to contractors, once construction was complete, fell outside the scope of a “payment service” under the PSD2.
What constitutes a “payment service” under PSD2?
This question lies at the core of Betaal Garant Nederland, where the Court was asked whether an intermediary that receives and later transfers funds as part of an escrow‑type arrangement is providing a regulated payment service.
Regulatory sanction and referral to CJEU
The central bank of the Netherlands had considered this was a payment service under PSD2 and had applied a penalty to the guarantee provider for providing unlicensed payment services. The matter was subsequently referred by the Dutch Trade Court to the CJEU by way of the preliminary reference procedure.
CJEU’s credit transfer test
The CJEU, following the opinion of Advocate General Campos Sánchez-Bordona, took the view that the activity does not constitute the “execution of payment transactions” (specifically a “credit transfer”) within PSD21. The CJEU held that in order for a “credit transfer” to be executed (i) the payer must issue a payment order to his or her payment service provider and (ii) that payment service provider must also hold the payer’s payment account. Put simply, in Betaal Garant Nederland the intermediary was not acting as an independent payment service provider in the regulatory sense as they did not hold the payer’s payment account.
Fact-specific exemption
The conclusion specifically restricts the application of the exemption to where the guarantee service provider receives the client’s funds into the payment account of a foundation which is linked to it (a peculiarity of the Dutch legal framework).
Money remittance not addressed
Importantly, the CJEU did not consider the potential for the service to fall within “money remittance” under Article 4(22) of PSD2 as this fell outside the referred question. The Advocate General had considered and rejected the application of money remittance, however that opinion is non-binding.
Future developments
There are two further cases before the CJEU awaiting final judgment where the Advocate General’s opinions have the potential for further recalibration. These questions arise at a particularly significant moment. As noted in our recent Insight article, whilst the Third Payments Services Directive (“PSD3”) and the related Payment Services Regulation (“PSR”) are close to formal adoption2, PSD2 remains the applicable law. The core concepts at issue will be carried across into the incoming framework, and the judgments of the CJEU are likely to shape how both PSD3 and the PSR will be interpreted.
What are the implications for fintechs and payment institutions?
The CJEU’s decision in Betaal Garant Nederland is confined to the fact-specific nature of the legal framework surrounding the Dutch guarantee service provider. Despite the CJEU’s reasoning considering the nature of a “payment service” the case is not expected to have significant impact on activities that fall within scope of authorisation under PSD2.
As noted above the EU legislator is in the process of replacing PSD2 with a new legislative framework, PSD3. While PSD2 remains the applicable law for the purposes of the present analysis, the judgment of the CJEU, although narrow in application, is likely to influence how key concepts are interpreted under the forthcoming regime.
Frequently asked questions
Does this judgment change what counts as a “payment service” under PSD2 for most businesses?
In short, no. The CJEU’s decision is confined to the fact-specific nature of the legal framework surrounding the Dutch guarantee service provider and is not expected to have significant impact on activities that fall within the scope of authorisation under PSD2. The ruling turns on the very particular structure of Betaal Garant’s product and the linked foundation under Dutch law, rather than setting out any new general principle that would redefine what constitutes a payment service for the market at large.
Does this judgment affect the position under PSD3 and the PSR?
While PSD3 and the related PSR are close to formal adoption, PSD2 remains the applicable law. The core concepts at issue will be carried across into the incoming framework, and the judgments of the CJEU are likely to shape how both PSD3 and the PSR will be interpreted. Matheson will monitor the forthcoming CJEU decisions and the transposition of PSD3 closely, particularly given that there are two further cases before the CJEU awaiting final judgment where the Advocate General’s opinions have the potential for further recalibration.
Footnotes
2. https://www.matheson.com/insights/psd3-and-psr-published-whats-changing-for-eu-payment-services/
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