On 24 November, the first set of prices for commercial open banking APIs under SPAA was published. This is a huge step forward towards a balanced open banking ecosystem with financial incentives for both banks and fintechs. Together with PSD3, it will drive faster adoption of account to account payments by European merchants and consumers.

In this article we explore what SPAA is, how it works together with PSD3, and what comes next.

What is SPAA?

The SEPA Payment Account Access scheme — or SPAA — is a first-of-its-kind initiative to create the next generation of premium open banking services, which go beyond PSD2 requirements.

Any EU bank or regulated fintech can apply to join and enable account-to-account payments and data services based on premium open banking APIs, for the benefit of merchants and consumers.

The origins of SPAA

In 2021, the European Payments Council (EPC) was tasked by the European Retail Payments Board to develop a set of premium (or value-added) open banking rules that would go beyond the compliance requirements of PSD2.

At the heart of the SPAA project is a desire to see the EU be a world leader in transitioning to a digital economy. It’s all about using Application Programming Interfaces (APIs) to upgrade analog systems into fully digital ones. The goal is to push ahead with digitalising the European economy, starting with payments. Eventually, this approach should be expanded and serve as a model to other sectors and verticals, beyond just payments.

TrueLayer has been a member of SPAA since 2021.

How is it different from PSD2?

With open banking rules in PSD2, the EU took ‘payment initiation’, from a marginal technology enabling account-to-account (A2A) payments, to an established payment method that can compete with cards and direct debits.

SPAA goes beyond PSD2. It introduces new features and functionalities that will help drive growth in account-to-account payments.

While PSD2 APIs are and will remain a regulatory requirement to be offered free of charge, SPAA is a voluntary, industry-led initiative that comes with a commercial model.

Within SPAA, European banks have an opportunity to develop and offer premium open banking APIs and be remunerated for access to these APIs.

How does PSD3 affect SPAA?

PSD3 will soon replace PSD2 and will complement SPAA.

Fintechs will continue to have access to a free and well-defined baseline functionality via PSD3 APIs. At the same time, they can choose to join SPAA to benefit from services and functionalities that go beyond this baseline.

As a result, new fintechs will continue to benefit from low barriers to entry, while banks and established fintechs will be able to bring to market more advanced payment services based on SPAA. It’s a model that should suit all parties.

What’s in SPAA?

SPAA consists of an API rulebook and a commercial model. Both have now been finalised and are available on the EPC website.

The API rulebook contains the premium functionalities that participants will need to support.

An example is the ability to initiate Dynamic Recurring Payments (DRP), similar to the UK’s VRP. With DRP, a customer will be able to set up recurring payments with variable start date, frequency, end date, period, maximum amount per period, and currency.

This enables exciting new use cases for open banking-based payments, such as paying seamlessly for subscriptions or even ‘account-on-file’ functionality that simplifies the checkout process for online purchases and helps ecommerce adoption.

The commercial model includes a set of fees that will apply to all participants. This includes both fees for each API call, and for requesting to apply various premium features to the transaction.

Why is it important?

SPAA should complement PSD2/PSD3 and help create a sustainable open banking ecosystem in Europe.

By introducing a remuneration model for premium features, SPAA is an opportunity for banks to monetise open banking and to help develop the next generation of digitally native, account-to-account payment services — all in partnership with fintechs and other payment service providers.

What happens next?

The scheme adherence documents were published at the beginning of December, which means banks and PSPs can now apply to join.

With both the API rulebook and the commercial model now published, the EPC will continue to work in 2024 towards getting the scheme up and running by setting up a scheme directory, defining a billing mechanism, and launching a pilot.

SPAA marks the beginning of a new phase in the rollout of open banking-based services across Europe, one defined by collaboration between banks and fintechs. Together with widespread instant credit transfers, it will help make A2A payments the main alternative to cards.

Want a closer look at key open banking developments in Europe? Watch our recent Q&A session, where I answered questions on PSD3, SPAA and other upcoming changes to open banking and instant bank payments.