Europe's Fintech Passport Promise Is Hitting a Wall — Here's Why

Alejandro Martínez · 2026-10-01

The European Union's single market for financial services has existed on paper since 1993. The idea is simple: get licensed in one member state, and you can operate across all of them. That's the European passport. But here's the thing — if you actually try to use it, you'll run into walls. Lots of them. In November 2025, the European Digital Finance Association (EDFA) and France FinTech launched "Bridging Borders" — a direct conversation between national regulators and fintechs about the real obstacles they face when expanding across the EU. It went so well that regulators asked for round two. On September 23, 2026, France FinTech hosted the second edition under EDFA's umbrella. About 40 people showed up, including 20 representatives from supervisory authorities. They didn't just talk theory. They dug into concrete cases from fintechs operating in multiple member states. The goal? Figure out where the gap between EU law and on-the-ground reality is widest — and what can be done about it. ### The Passport: Great in Theory, Frustrating in Practice In principle, a company licensed in its home state can operate anywhere in the EU thanks to the passport. In practice, fintechs keep hitting local administrative requirements that don't clearly come from EU law. These requirements slow things down, complicate expansion, or stop it altogether. Here's what came out of the discussions: - **Finqware** mapped complaint channels for account information service providers (TPPs) across 30 EEA jurisdictions. Only 10 have a channel that actually works for a cross-border player. Just 4 publish a response deadline. - **Memo Bank** documented similar problems accessing national beneficial ownership registers. In Luxembourg, Belgium, Ireland, the Netherlands, and Spain, access still requires a local presence or a national e-ID — even though the bank operates legally under freedom to provide services. - **Mifundo** put numbers on credit data fragmentation. 45 million European consumers have financial history in more than one member state. Yet access to the data needed to assess their creditworthiness depends on wildly different national rules. Of 41 European registers Mifundo approached, 19 granted access, 15 are still in talks, and 7 refused — including France, Belgium, Hungary, Bulgaria, Finland, Cyprus, and the Netherlands. - **Lemonway** highlighted two more fragmentation sources for payment service providers: different definitions of PSP agent status across countries, and AML/CFT obligations that vary in procedures, renewal cycles, and reporting requirements. ### API Quality: It's Not Just About Availability The conversation also turned to bank interface performance. For fintechs, having an API isn't enough. If the user journey is unstable, unclear, or hard to use, the API might as well not exist. Quality directly determines whether open banking actually works — and whether end users get smooth services. > "The passport was supposed to make borders disappear. Instead, fintechs are spending millions navigating a patchwork of national rules that were never meant to exist." ### What Comes Next? The Bridging Borders sessions show that the gap between EU law and local implementation is real — and measurable. Regulators are listening. But listening isn't the same as fixing. The fintechs in the room made one thing clear: they're not asking for special treatment. They're asking for the single market they were promised. That means consistent rules, usable complaint channels, and APIs that actually work. Until then, the European passport will remain a nice idea — just not a very useful one.