European Banking Authority follow-up peer review finds persistent divergences in PSD2 authorisation of payment and electronic money institutions

The European Banking Authority published a follow-up peer review of Member State supervisory practices for authorising payment institutions and electronic money institutions under the revised Payment Services Directive (PSD2). It finds notable improvements and greater convergence since the 2023 peer review, but continued material differences in governance, internal control mechanisms and local substance assessments that can create regulatory arbitrage risks and an uneven playing field across Member States. Covering 2022–2024, the review assesses implementation of the 2023 recommendations across authorisation processes, application of the EBA Guidelines on authorisation, governance and internal controls, AML/CFT frameworks and local substance. Application volumes and authorisation timelines still vary significantly across jurisdictions; the EEA median authorisation time from application submission is 9.5 months, with delays often linked to incomplete or low-quality applications and the time needed to remediate deficiencies. Supervisors have increased efficiency through clearer guidance, earlier engagement with applicants and streamlined internal procedures, but the EBA notes that delays and divergent supervisory approaches persist, and it encourages competent authorities to close remaining gaps and work towards greater convergence in governance and internal control frameworks.