Advocate General Opinion in Case C-51/25 – Betaal Garant Nederland CV v De Nederlandsche Bank: Implications for the scope of payment services under PSD2

Introduction

Advocate General Opinion in Case C-51/25 – Betaal Garant Nederland CV v De Nederlandsche Bank: Implications for the Scope of Payment Services Under PSD2

A recent Opinion delivered by the Advocate General in Case C-51/25, Betaal Garant Nederland CV v De Nederlandsche Bank NV before the Court of Justice of the European Union (CJEU) may significantly influence how payment services are interpreted across the European Union.

The case is particularly relevant for businesses that hold customer funds in a fiduciary capacity or process transfers of funds as an ancillary element of their main commercial activity.

The dispute originates from the Netherlands and concerns whether the activities of an intermediary company constitute a “payment service” within the meaning of the Second Payment Services Directive (PSD2).

Background to the case

The case concerns a Dutch company, Betaal Garant Nederland CV (“Betaal”), which acts as an intermediary between clients and construction contractors.

Betaal offers a service designed to provide security for clients commissioning construction work. Under this model:

• Clients transfer part of the construction cost to an affiliated entity, the Betaal Foundation.

• The funds are held in a bank account maintained by the Foundation.

• The money is released to the contractor only once the client confirms in writing that the work has been completed satisfactorily.

The Dutch central bank, De Nederlandsche Bank (DNB), took the view that this activity constitutes a payment service under PSD2. In particular, it argued that the arrangement involves the execution of credit transfers.

Betaal challenged this interpretation before the Dutch courts. As the dispute required interpretation of EU law, the national court referred questions to the Court of Justice of the European Union for a preliminary ruling.

The regulatory question

At the centre of the case is whether Betaal’s activity qualifies as the “execution of credit transfers” within the meaning of PSD2.

The service involves the following steps:

1. A client transfers funds intended as a security deposit to the Betaal Foundation.

2. The funds are held temporarily in the Foundation’s bank account.

3. The funds are subsequently transferred to the contractor, subject to the client’s confirmation that the work has been completed satisfactorily.

The Advocate General’s opinion

The Advocate General concluded that Betaal’s activity does not constitute a payment service under PSD2. The Opinion relies on several key arguments.

1. The payment transactions are executed by banks

The Advocate General emphasises that a credit transfer, within the meaning of PSD2, is executed by the payment service provider that holds the payer’s payment account.

In the present case, two separate payment transactions occur:

• a transfer from the client to the Betaal Foundation; and

• a transfer from the Betaal Foundation to the contractor.

According to the Advocate General, both transfers are executed by the respective banks of the client and the Foundation. Betaal and its Foundation merely hold the funds and do not themselves execute payment transactions on a payment account.

Furthermore:

• the Foundation does not hold payment accounts in the name of clients; and

• the payment to the contractor is conditional upon the client’s approval.

The Advocate General also notes that the client retains the ability to withhold approval and therefore prevent the transfer to the contractor. This would be difficult to reconcile with Article 80 PSD2, which generally provides that payment orders cannot be revoked once received.

On this basis, the Opinion concludes that the transfers are incidental to Betaal’s main service, which is providing a guarantee mechanism between clients and contractors.

2. Payment services are not Betaal’s primary activity

The Advocate General further argues that PSD2 applies to providers that offer payment services as a regular occupation or business activity.

In his view, Betaal’s primary activity is the provision of a construction security deposit service, rather than the provision of payment services. Applying the full regulatory regime for payment institutions — including authorisation, supervision and capital requirements — would therefore be disproportionate.

3. Consumer protection considerations

The Advocate General acknowledges that consumer protection is an important objective of PSD2 but argues that it cannot justify an overly broad interpretation of the concept of a payment service provider.

In support of this view, the Opinion draws a comparison with professionals such as lawyers or notaries, who may also hold funds on behalf of clients and transfer them to third parties without being classified as payment service providers under PSD2.

For example, under Dutch law, clients may deposit funds with a notary as security in certain transactions.

4. The Advocate General’s rejection of the “Money Remittance” classification

The Advocate General also rejects the argument that Betaal’s activity constitutes money remittance.

The Opinion suggests that money remittance typically involves simple, immediate, and unconditional transfers of funds, whereas Betaal’s transfers are conditional on the client’s approval and involve the deduction of a commission.

The Advocate General’s proposed conclusion

The Advocate General ultimately concludes that a service involving the receipt and subsequent transfer of funds by an intermediary does not constitute a payment service where:

• the intermediary receives funds from a client into its own account in the context of a contractual arrangement with both the client and a contractor; and

• the intermediary subsequently transfers those funds to the contractor once the client provides consent.

Potential implications

Although Advocate General Opinions are not binding, they are frequently followed by the Court of Justice.

If the Court adopts the same reasoning, the ruling could have significant implications for a range of business models that receive and hold client funds before transferring them to third parties.

This could include:

• online platforms facilitating payments between buyers and sellers

• marketplaces collecting payments from consumers before remitting them to merchants

• other intermediary services holding funds in a fiduciary capacity.

The decision may be particularly relevant for businesses operating across the EU, including in jurisdictions that have historically taken a strict approach to the scope of payment services regulation, such as Germany under the supervision of BaFin.