Distributing PSP

The distributing PSP is the institution on the individual user's side of a digital euro payment. If you are a retail bank wondering what your role is, this is it.

The role#

The digital euro is issued by the Eurosystem but distributed only through supervised PSPs — banks, payment institutions and e-money institutions. The distributing PSP is the one facing the individual user. It handles:

• User registration and lifecycle management — onboarding individuals and managing their accounts over time.
• Alias registration and management — offering the option to register an alias for payments.
• Switching — supporting a user moving their account between PSPs.
• The front end — the app or web pages through which the user actually consumes digital euro services.

It does not issue the money and it does not settle the transaction. Settlement happens on the DESP. The distributing PSP is the distribution, servicing and experience layer.

The counterpart role#

The scheme splits the two sides of a payment by user type:

The obligation that changes the calculus#

For credit institutions this is not a product decision in the ordinary sense. Once the digital euro launches, credit institutions will be obliged to offer basic digital euro services to customers on request, and basic services are free for individuals.

That reframes the question. A bank is not deciding whether to be a distributing PSP; it is deciding how to become one — build the integration in-house, or use a TSP.