EU's Fintech Passport: Why It's Still Not Working for Cross-Border Growth

Alejandro Martínez · 2026-10-01

The European single market for financial services has existed on paper since 1993. The idea is simple: a company licensed in one member state should be able to operate freely across the entire Union thanks to the European passport. But in reality, fintechs trying to expand cross-border still hit a wall of friction. In November 2025, the European Digital Finance Association (EDFA) and France FinTech launched the first Bridging Borders event. The goal? Create a direct dialogue between national supervisors and fintechs about the concrete obstacles they face when scaling across the single market. The response was so positive that, at the request of several supervisors, EDFA members decided to keep the conversation going. On September 23, 2026, France FinTech hosted the second edition of Bridging Borders under the EDFA umbrella. About 40 participants attended, including 20 representatives from supervisory authorities. The discussions focused on real-world cases shared by fintechs from multiple member states. These stories revealed the gap between EU rules and how they're actually enforced on the ground—and sparked ideas for improvement. ### The European Passport: Principle vs. Practice In theory, a company licensed in its home country can operate anywhere in the EU via the passport. In practice, many fintechs still run into local administrative requirements that aren't clearly based on EU law. These demands complicate, slow down, or even block cross-border expansion. Here's what some fintechs reported: - **Finqware** mapped complaint channels for account information service providers (TPPs) across 30 EEA jurisdictions. Only 10 offer a channel that a cross-border player can actually use, and just 4 publish a response deadline. - **Memo Bank** documented similar hurdles accessing national beneficial ownership registers. In Luxembourg, Belgium, Ireland, the Netherlands, and Spain, access still requires a local presence or a national eID—even though the bank operates legally under freedom to provide services. - **Mifundo** quantified the fragmentation of credit data. 45 million European consumers have financial history in more than one member state. Yet access to the data needed to assess their creditworthiness is subject to wildly different national conditions. Out of 41 European registers Mifundo approached, 19 granted access, 15 are still in talks, and 7 refused—including in France, Belgium, Hungary, Bulgaria, Finland, Cyprus, and the Netherlands. - **Lemonway** highlighted two sources of fragmentation for payment service providers: diverging definitions of PSP agent status across countries, and AML/CFT obligations that vary in procedures, renewal cycles, and reporting requirements. > "The passport works in theory, but in practice it's like having a driver's license that's only valid in some states—and each state has its own hidden rules," one participant noted. ### API Quality: Beyond Just Availability The talks also covered the performance of bank interfaces. For fintechs, having an API available isn't enough if the user journeys remain unstable, unclear, or hard to use. API quality directly determines how well open banking works and how smoothly services reach end users. In other words, it's not about checking a box—it's about whether the API actually functions reliably when you need it. Poor-quality APIs can undermine the entire promise of open banking, leaving fintechs and their customers frustrated. ### What's Next? The second Bridging Borders event made one thing clear: the gap between EU law and local implementation is still wide. But by bringing supervisors and fintechs to the same table, there's hope for practical fixes. The conversation is ongoing, and the fintechs involved are pushing for more consistent, transparent, and truly cross-border-friendly rules. For now, if you're a fintech looking to expand across Europe, be prepared for a maze of national quirks. The passport is a powerful tool—but it's not yet a magic key.