On 16 July 2026, the Court of Justice of the European Union (the CJEU) delivered its judgment in Betaal Garant Nederland CV v De Nederlandsche Bank NV (Case C‑51/25). This follows the Advocate General’s opinion which was published in February 2026.

Facts of the case

The case concerned a Dutch company, Betaal Garant Nederland CV (Betaal), which provided security deposit and completion guarantee products to individuals engaged in construction projects.

Under Betaal’s security deposit product, a client, a contractor and Betaal entered into a tripartite agreement. Under that agreement, the client transferred the security deposit from its payment account to the payment account of Stichting BGN Zekerheidsstelling, a foundation linked to Betaal (the Foundation). If the works contract was performed satisfactorily, the Foundation instructed its bank to transfer the sum from its payment account to the contractor’s payment account.

The Dutch Central Bank (DNB) found that Betaal’s offering of the security deposit service constituted the carrying out of a payment service within the meaning of the national law transposing Directive (EU) 2015/2366 (PSD2). DNB ordered Betaal to cease providing the service and imposed a periodic penalty payment. Betaal challenged this finding in the Dutch courts, resulting in a request for a preliminary ruling being referred to the CJEU.

The Advocate General’s opinion

The Advocate General’s (AG) opinion was that Betaal did not provide a payment service, but rather made use of the payment services of the client’s bank and the contractor’s bank in order to provide the security deposit service.

The AG placed weight on recital 24 of PSD2, which indicates that the directive only applies to providers offering payment services as their “regular occupation or main business activity”. On that basis, the AG noted that Betaal’s principal activity was arranging security deposits, with the funds transfers being ancillary to that service.

The AG also considered whether the service constituted “money remittance” under Article 4(22) of PSD2, concluding it did not, given that the transfers were not immediate, automatic and unconditional transfers and given the ancillary nature of Betaal’s transfer activity.

CJEU’s judgment

The CJEU held that a service of receiving and forwarding of funds provided by an intermediary is not a “payment service”, and specifically not a “credit transfer”, where the intermediary receives client funds into the payment account of a linked entity and, with the client’s consent, forwards them to a contractor.

The CJEU’s reasoning followed its settled interpretive approach; considering the wording of the law, its application in context and its objectives, holding:

• Wording: a “credit transfer” requires (i) the payer to issue a payment order to a payment service provider (PSP) and (ii) the PSP to hold the payer’s payment account. Here neither Betaal nor the Foundation held payment accounts on behalf of their clients. Rather, the transfers were carried out by the clients’ and the Foundation’s banks. As such, neither Betaal nor the Foundation were PSPs, and the security deposit service was not a PSD2 payment service.
• Context: PSD2 applies to the enumerated categories of PSPs providing services on a professional and regular basis. The PSD2 requirements do not apply to a funds transfer made only to carry out another service which is offered as the primary service, which itself is not regulated under PSD2. The CJEU noted that Betaal did not fall into any of the categories of PSP set out in PSD2, does not itself transfer funds and that the primary service being offered was the security deposit service, which was not itself a payment service.
• Objectives: the objectives of PSD2 are to provide consumers with a high level of consumer protection, and to ensure legal clarity and consistent application of PSD2. However, the consumer protection objective could not alter or extend the scope of PSD2 beyond its wording, and it was not apparent that PSD2 intended to make the provision of a security deposit service subject to the legislative scheme for payment services.

Key takeaways

The judgment is clear that where an intermediary does not hold the payer’s payment account that intermediary’s transfer activities should not constitute a credit transfer. However, where an intermediary relies only on the fact that the funds transfer is “ancillary” to a primary business activity, a fact-specific assessment will be required in each case.

The CJEU did not address the “money remittance” classification as this fell outside the referred question. As such, divergent supervisory approaches to the ancillary services question, and unresolved issues such as the money remittance characterisation may persist.

PSD2 is due to be modernised by the third Payment Services Directive and related reforms (as to which, see our insights post here: PSD3 and PSR: Final compromise texts published). Whether the concepts addressed here, including the scope of “payment service” and the ancillary services question are clarified further remains to be seen.