Correspondent bank accounts for finance institutions. SEPA and TARGET2 connection

Payment Service Providers, Electronic Money Institutions, Cryptocurrency exchange as well as other non-banking Fintech’s usually need the segregated client funds account or correspondent account with the bank or other financial institution to safeguard client (third party) funds and process client payments. Opening of the account for client (third party) funds processing usually is much more complicated comparing to the opening of the account for own funds. Banks deeply investigate internal AML/KYC procedures implemented by Fintech’s and origin of the funds to be processed thorough the account as third party payments.

Single Euro Payments Area (SEPA) is payment integration and simplification of pan-European bank transfers denominated in EUR within the SEPA zone and EU/EEA area. In SEPA more than 500 million individuals and over 20 million businesses can send and receive EUR payments across Europe at low cost, fast and easy like domestic payments in their home country.

Correspondent and segregated client funds accounts in commercial banks.

Accounts for third party funds safeguarding and processing for Fintech’s.

Direct access to SEPA for non-banks.

Payment and Electronic Money institution as well as other Fintech’s allowed to connect SEPA directly without intermediary commercial banks and process EUR payments at low cost under the same terms and conditions as commercial banks.

Direct connection to SEPA through the Central Bank.

Direct technical access through the Central Bank via flexible connection multiprotocol label switching or VPN via secure internet, enabling send and receive SEPA payments. Access to instant payments and SEPA schemes: SCT, SDD Core, SCT inst., STRP2, RT1, TIPS.

SEPA payments at low cost.

No entry or annual fees. SEPA Credit Transfers, Instant payments, Direct Debits at low cost.

Individual client IBAN account generation.

Possibility to generate and open individual client IBAN accounts using assigned unique 5-digit financial institution code. Lookup for the IBAN account according to the alternate mobile phone number (MSISDN) or Email (URI) identifier.

SWIFT BIC codes for non-banks.

Payment service providers such as Payment and Electronic Money institution as well as other non-banking Fintech’s are allowed get their own SWIFT BIC codes.

Client funds safeguarding with the Central Bank.

Licensed Payment and Electronic Money institution as well as other non-banking Fintech’s allowed to safeguard own and client (third party) funds with the Central Bank of Euro Zone member state. It eliminates the risk and costs usually associated with the funds safeguarding with commercial banks.

TARGET2 connection.

TARGET2 provides an alternative to SWIFT sending and receiving payments in EUR worldwide. TARGET2 does not requires creation of own correspondent banking network. Non-banks such as Payment and Electronic Money Institutions allowed to use TARGET2 functionality.

Contact us:

Kęstutis Kvainauskas

Partner, Attorney at Law
kestutis.kvainauskas@ecovisproventuslaw.com
+370 5 212 40 84
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