Open-banking payment initiation
Maya Chen pays at a merchant checkout through Larkpay, a fictional licensed payment institution acting as a payment initiation service provider (PISP). Larkpay asks Bank Alfa to send a SEPA credit transfer to Northstar Bank. (SYNTHETIC / TRAINING ONLY)
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Maya consents at the merchant checkout
Maya Chen (payer) → Larkpay (PISP)
Instead of typing card details, Maya chooses to pay by bank. She gives Larkpay consent to start a single payment of EUR 42.50 from her account — consent is for this one payment, not open-ended access.
Step 1 of 9: Maya consents at the merchant checkout
- 03ProcessingBank Alfa applies strong customer authenticationBank Alfa (ASPSP)
- 05PostingBank Alfa validates and debits MayaBank Alfa (ASPSP)
- 07Clearing obligationThe CSM clears the transferBank Alfa (ASPSP) → Northstar Bank (creditor agent)
- 08SettlementThe transfer settles between the banksBank Alfa (ASPSP) → Northstar Bank (creditor agent)
- 09PostingNorthstar Bank credits the merchantNorthstar Bank (creditor agent)
Full step-by-step text (works without JavaScript)
- 03ProcessingBank Alfa applies strong customer authenticationBank Alfa (ASPSP)
Bank Alfa, not Larkpay, authenticates Maya. It applies strong customer authentication (SCA) — typically a redirect or app check with two independent factors — because only the account-holding bank may authorise moving her money.
- 05PostingBank Alfa validates and debits MayaBank Alfa (ASPSP)
With SCA passed, Bank Alfa checks funds and books the EUR 42.50 debit against Maya's account. Her money has left her account, but nothing has yet moved between the banks.
- DR Maya Chen's current account at Bank Alfa — EUR 42.50
- 07Clearing obligationThe CSM clears the transferBank Alfa (ASPSP) → Northstar Bank (creditor agent)
The clearing and settlement mechanism validates the pacs.008 and calculates the obligation between the two banks — who owes whom — before any money moves.
Clearing produces an obligation. The banks do not have their money yet — that happens at settlement.
- 08SettlementThe transfer settles between the banksBank Alfa (ASPSP) → Northstar Bank (creditor agent)
The obligation settles across the banks' settlement accounts in central bank money. Only now has EUR 42.50 truly moved from Bank Alfa to Northstar Bank.
- DR Bank Alfa settlement account — EUR 42.50
- CR Northstar Bank settlement account — EUR 42.50
- 09PostingNorthstar Bank credits the merchantNorthstar Bank (creditor agent)
Northstar Bank credits the merchant's account and confirms receipt. The checkout completes: Maya consented, her bank authenticated and debited her, and the money settled over the SEPA rails.
- CR Merchant's account at Northstar Bank — EUR 42.50
What this simplifies: One payment-initiation call over a generalised open-banking API, then a single SEPA Instant credit transfer through one CSM. Real deployments vary the API standard, the SCA journey (redirect vs decoupled) and add reconciliation. Larkpay is fictional; the amount is illustrative.
Sources for this flow3
- Official requirement
PSD2 and the RTS on strong customer authentication and secure communication ↗ — European Banking Authority · PSD2 + RTS on SCA and secure communication
Referenced from the European Banking Authority's public summaries, guidelines, and technical standards on payment services.
- Scheme-specific rule2025 version 1.1 (EPC125-05)
2025 SEPA Credit Transfer rulebook ↗ — European Payments Council
Version 1.1 replaced version 1.0 at publication on 5 October 2025 and is stated to remain in effect up to 21 November 2027. It moves the date from which the unstructured address format is no longer permitted to 15 November 2026.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: One PISP, one ASPSP, one CSM and a single settlement cycle. API message shapes are generalised, and refund or reconciliation handling is omitted; Larkpay is a fictional payment institution and the amount is illustrative.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.