• Mike Shafro, CEO at xpate


• 27.06.2025 11:00 am
#EuropePayments #FintechBarriers

Historically, conducting and managing transactions across European borders was a costly and complicated process. To address this, unified transfer schemes were introduced to streamline cashless euro payments across the EU. This is where SEPA (Single Euro Payments Area) transfers, also known as direct debits, have become essential, particularly for fintech companies.

While SEPA payments have enabled leading fintech innovators like Revolut and TransferWise to revolutionise how people make payments and transfers across borders, many fintechs still face significant barriers to access. High entry costs, complex onboarding, reliance on intermediary banks, and fragmented implementation across EU member states continue to limit participation. Regulatory compliance, operational dependencies, and uneven infrastructure create further hurdles, making it difficult for emerging players to offer seamless, competitive payment solutions across Europe

Breaking the bottleneck: a new access point

However, access points are not readily available throughout Europe. Until recently, Lithuania’s CENTROlink, operated by the Bank of Lithuania, was the only realistic access point for EMIs across the EEA to connect to SEPA. Traditionally, only accessible through banks or central banks in the provider’s home country, CENTROlink broke the pattern to allow non-bank PSPs to bypass commercial banks. 

By the end of 2023, 143 PSPs from 12 EEA countries, many EMIs with no local SEPA access options, relied on CENTROlink, with 228m in SEPA processed volume. As the number of participants and volume of payments grows, this puts more pressure on the payment system and increases the dependency by the institutions it serves.

As the de facto gateway to SEPA for almost all EMIs and PSPs, CENTROlink effectively became a monopoly payments hub with no real market competition. Until now. 

xpate’s success in working with Latvijas Banka to secure direct SEPA access creates a new precedent — not only for Latvia, but for Europe’s entire fintech sector. xpate is the first proof that EMIs can localise SEPA access beyond Lithuania, redirecting a portion of European money flows through Latvia, and opening the door for other EMIs to follow.

Lessons from Latvia for Europe

Allowing more routes into SEPA is important for the continued health of the European payments ecosystem. Clustering around one access point introduces systemic risk and a potential “single point of failure”, as well as inhibiting regional diversity. The sector needs accessible infrastructure to drive innovation and develop competitive products. 

Latvia now emerges as a second pillar for EMI participation in SEPA, breaking the monopoly. xpate is not just a participant — it’s a pathfinder, demonstrating Latvia is a viable alternative for access to euro payments and boosting its status as a growing force in fintech. 

If more countries commit to enabling direct access for non-bank PSPs and building open, interoperable infrastructure, Europe can move towards a more resilient, inclusive, and innovation-driven payments landscape. One where progress isn’t confined to a few, but made available to all.