Payment initiation service

PSD2 defines a payment initiation service as a service that initiates a payment order at the request of the user from a payment account held at another payment service provider. In practice the payer chooses to pay by bank, picks the bank, confirms the prefilled transfer in the bank's own app, and the payment initiation service provider, or PISP, passes the order to the bank through its interface. The UK Government Commercial Agency describes the same flow for payments to public bodies.

The payment is a push transfer from account to account, with no card network in between. With SEPA instant credit transfers the payee has the money within seconds. What is missing is the card chargeback, a gap the page on account-to-account payments explains.

Germany had payment initiation before PSD2. Sofortüberweisung logged into the payer's online banking with the payer's PIN and TAN and triggered the transfer. The banks' online banking terms forbade customers to use these credentials with non-bank payment services. On July 5, 2016, the Bundeskartellamt declared those rules a restriction of competition under German and European law, and the decision became final in 2020.

PSD2 then gave licensed PISPs a legal right of access to payment accounts. Sofort itself became part of Klarna, which bought it in 2014, and was discontinued as a standalone payment method on March 31, 2025, as Stripe told its merchants.

A PISP needs authorization as a payment institution under section 10 ZAG. If payment initiation is its only service, section 12 ZAG sets the initial capital at 50,000 euros, against 125,000 euros for the full range of payment services. Under section 16 ZAG it also needs professional indemnity insurance or a comparable guarantee for its liability.

A PISP never holds the payer's money: the transfer runs from the payer's bank straight to the payee's account. Its capital requirement is lower than that of a payment institution that holds customer funds.

Finance Loop is the meeting place for the people who build account-to-account payments in Germany, Austria and Switzerland: PISPs, bank teams behind the PSD2 interfaces, merchants and payment schemes. It connects the finance, IT and AI communities, with events in Frankfurt, Munich, Berlin and Hamburg.

Finance Loop held a side event during Sibos 2025 across from Messe Frankfurt and is a strategic partner of the Digital Euro Association. The pages on Wero and variable recurring payments follow the next steps of bank-based payments.

A PISP is a licensed firm that starts a transfer from the payer's bank account on the payer's instruction, for example at an online checkout. The payer confirms the payment with strong customer authentication at the bank, and the money goes directly to the payee.

The payer authenticates in the bank's own environment, and the merchant never sees bank credentials or card data. The PISP is supervised by BaFin or another EEA supervisor and insured for its liability. A card chargeback does not exist for these payments, so disputes go through the merchant or the bank.

Klarna bought Sofort in 2014 and integrated it into its own payment options. Sofort was discontinued as a standalone payment method on March 31, 2025, and merchants moved to Klarna's pay-now option or other bank payment methods.