Opinion of the Advocate General — ECLI:EU:C:2026:365
Date: 2026-04-30
Language of the case: Lithuanian

Translation C-274/25 – 1 
Case C-274/25 
Request for a preliminary ruling 
Date lodged: 
10 April 2025 
Referring court: 
Lietuvos vyriausiasis administracinis teismas (Lithuania) 
Date of the decision to refer: 
9 April 2025 
Applicant at first instance and appellant: 
Alternative Payments UAB 
Defendant at first instance and respondent: 
Lietuvos bankas 
  
[…] 
LIETUVOS VYRIAUSIASIS ADMINISTRACINIS TEISMAS 
(Supreme Administrative Court Of Lithuania) 
ORDER 
9 April 2025 
Vilnius 
The Chamber, in extended composition, of the Supreme Administrative Court of 
Lithuania, […] [the composition of the court], has examined, at a sitting of the 
court under the written appeal procedure, the administrative case concerning the 
appeal lodged by the appellant, the private limited liability company Alternative 
Payments, against the judgment of 14 September 2023 of the Vilniaus apygardos 
administracinis teismas (Vilnius Regional Administrative Court) (Regional 
Administrative Court as from 1 January 2024) in the administrative case relating 
to the appellant’s […] complaint against the respondent, Lietuvos bankas (Bank of 
Lithuania), concerning the annulment of its resolution. 
EN 
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The Chamber, in extended composition, 
has established as follows: 
I. 
1 The dispute in the case originated between the appellant, a private limited liability 
company (‘UAB’) Alternative Payments (‘the appellant’, or ‘the Company’) and 
the respondent, Lietuvos bankas (‘the respondent’), concerning the annulment of 
Resolution No 03-126 of the Board of Lietuvos bankas of 26 August 2022 ‘On the 
application of an enforcement measure to Alternative Payments UAB’ (‘the 
Resolution’). 
2 The appellant brought the matter before the Vilnius Regional Administrative 
Court, requesting the annulment of the Resolution. In its reply to the appellant’s 
action, the respondent, Lietuvos bankas, requested that the action be rejected. 
3 By its decision of 14 September 2023, Vilnius Regional Administrative Court 
dismissed the appellant’s action and, inter alia, found that Lietuvos bankas was 
justified in finding that the infringements referred to in the Resolution had taken 
place, and that the appellant, as a holder of a licence to act as a payment institution 
for the provision of payment services, i.e. money remittance and the issuance of 
payment instruments and/or acquiring of payment transactions, had also 
unjustifiably provided a direct debit service. 
4 The appellant appealed to the Supreme Administrative Court of Lithuania, 
requesting the judgment of the first instance be set aside and a new judgment be 
adopted upholding the action and annulling the Resolution. 
5 In its response to the appellant’s appeal, the respondent, Lietuvos bankas, 
requested that the appeal be dismissed and that the judgment of the first instance 
court remain unchanged. 
6 […] [the appellant’s request for reference to the Court of Justice] 
The Chamber, in extended composition, 
finds as follows: 
II. 
7 The case raises questions concerning the interpretation of European Union law. It 
is therefore necessary to refer the matter to the Court of Justice of the European 
Union for a preliminary ruling (Article 4(3) of the Law of the Republic of 
Lithuania on Administrative Proceedings). 
Subject matter of the dispute and presentation of the relevant facts. 
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8 The Resolution of Lietuvos bankas revoked the Company’s licence to act a 
payment institution entitling it to provide the payment services referred to in 
Articles 5(5) and (6) of the Law of the Republic of Lithuania on Payments (‘the 
Law on Payments’) (the wording relevant to the dispute, in force as from 
2 November 2021). The Resolution states that a total of ten infringements have led 
to the revocation of the licence, but the reference for a preliminary ruling relates 
only to one of the infringements (No 5), that is to say, the fact that, as admitted by 
Lietuvos bankas, the Company has provided direct debit services without a 
licence, and has therefore infringed the requirements of Article 4(1) of the Law of 
the Republic of Lithuania on Payment Institutions (‘the Law on Payment 
Institutions’) (the wording relevant to the dispute, in force as from 15 June 2020). 
9 The data in the case file confirm that the Company was granted a licence by the 
Resolution […] of the Board of Lietuvos bankas of 16 September 2014, entitling it 
to provide payment services, that is to say, the issuance and/or acquisition of 
payment instruments and money remittance […]. In 2017, the Company joined the 
CENTROlink payment system of the Single Euro Payments Area (‘SEPA’) for 
direct debit (SEPA Direct Debit, SDD). 
10 Lietuvos bankas found that the infringement referred to in paragraph 5 of the 
Resolution had taken place, namely, that the Company, as a holder of a licence to 
act as a payment institution for the provision of payment services such as money 
remittance (Article 5(6) of the Law on Payments) and issuing of payment 
instruments and/or acquiring of payment transactions (Article 5(5) of the Law on 
Payments), also provided execution of direct debits (Article 5(3) of the Law on 
Payments), having found that the Company created payment accounts for all 
customers in IBAN format, and that an identification code was created for every 
customer. The Company debits funds from the payer’s payment account when the 
payment transaction is initiated by the payee (the merchant who is the Company’s 
customer), who has obtained the payer’s consent for such a debit. The funds 
debited from the payer’s payment account are transferred by the Company to the 
payee’s account opened with the Company in IBAN format in the CENTROlink 
payment system. Subsequently, funds are transferred at various intervals to 
payment accounts specified by the customers of the Company opened with other 
payment service providers. 
11 In its appeal, the Company submits that the first instance court erred in finding 
that the Company provided a direct debit service and in finding that the key 
criterion for assessing whether the service provided is a direct debit is not the 
opening of payment accounts for the Company’s business customers, but rather 
who initiates the payment transaction. The Company does not open and monitor 
payment accounts for merchants, which is a qualifying characteristic of a direct 
debit service, nor does it execute direct debit transactions as they are executed by 
the payer’s payment service provider (‘PSP’). In 2017, the European Payments 
Council approved the appellant’s application to join the SEPA Direct Debit and 
SEPA Credit Transfer system. According to the appellant, that confirms that 
SEPA Direct Debit is merely a technical solution necessary for the Company to 
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provide a payment processing service. The fact that the services provided by the 
Company were consistent with its licence is evidenced by the Addressable BIC 
Holder Agreement by which Lietuvos bankas, acting as a direct participant of 
Lietuvos bankas’ retail payment system SEPA-MMS and acting in compliance 
with the legislation, enabled the Company to submit payment orders and receive 
payments from that system. The Company relies on the clarification provided by 
the Luxembourg Financial Supervisory Authority (Commission de Surveillance 
[du] Secteur Financier), according to which the provision of services executing 
payment transactions by debit and payment transactions using credit requires 
payment accounts to be opened. 
12 In its response to the appeal, the respondent, Lietuvos bankas, points out that the 
collection of funds is only part of the direct debit transaction and is not a separate 
payment service or technical solution. 
13 The Chamber, in extended composition, notes that the following facts have been 
established in the case: 
13.1. In the Company, each customer (merchant) has an account opened in IBAN 
format and is assigned an identification code, but the functionality of those 
accounts is limited and customers (merchants) do not have access to those 
accounts, cannot initiate payments, etc. 
13.2. The payer (buyer) has given consent to the Company’s customer (merchant, 
payee) to debit funds from his/her account. 
13.3. The Company’s customer (merchant), who is the ultimate payee of the 
funds, initiates the debiting from the account of the payer (buyer). 
13.4. The Company provides the direct debit instructions of its customers 
(merchants, payees) to the SEPA Direct Debit scheme using the services of the 
CENTROlink payment system, and on that basis funds are collected based on the 
prior consents of the payers of funds which are given to customers (merchants, 
payees) to debit funds periodically from their payment accounts. The debiting of 
funds from the payer’s account is carried out by the payer’s PSP which opens and 
manages the account. 
13.5. The collected funds are transferred to the restricted accounts opened for 
customers (merchants, payees) with the Company. Those funds are subsequently 
transferred by the Company to payment accounts specified by the customers 
(merchants, payees) with other payment service providers. 
13.6. The Company’s General Terms and Conditions of Contract state that the 
Company provides a SEPA Direct Debit collection service to its customers and 
facilitates, by alternative means, the receipt and processing of payment 
transactions from consumers paying for goods and services. A SEPA Direct Debit 
mandate is an agreement between the Company’s customer and the customer’s 
user (debtor), where authorisation is given to the Company’s customer to debit 
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payments from the payment account held by the user (debtor) of the Company’s 
customer. The Company’s customer is obliged to obtain a SEPA Direct Debit 
mandate from its user (debtor). The user may request his/her PSP to return funds 
collected by SEPA Direct Debit within eight weeks after the collection of the 
funds and the Company may not refuse to accept that authorised return initiated 
by the PSP of the user (debtor) […]. 
Relevant provisions of national and EU legislation 
14 Article 4(1) of the Law on Payment Institutions states that a payment institution 
may provide solely the payment services indicated in the licence issued to it by the 
supervisory authority. Article 2(5) of the Law provides that a payment institution 
is a legal person which has been issued with a payment institution licence or a 
licence of a payment institution providing only an account information service or 
a payment institution licence for restricted activities. According to Article 6(3) of 
the Law on Payments, payment institutions are classified as payment service 
providers. 
15 Article 5 of the Law on Payments provides that payment services consist of 
payment transactions, including the transfer of funds held in a payment account 
with the payment service provider of the payment service user or with another 
payment service provider: execution of direct debits, including one-off direct 
debits, execution of payment transactions using a payment card or similar 
instrument and/or execution of credit transfers, including standing orders 
(paragraph 3); issuing payment instruments and/or acquiring of payment 
transactions (paragraph 5); money remittances (paragraph 6); payment initiation 
services (paragraph 7). 
16 Article 2 of the Law on Payments defines the following terms: 
16.1. ‘acquiring of payment transactions’ means a payment service provided by a 
payment service provider contracting with a payee, to accept and process payment 
transactions, which results in a transfer of funds to the payee (Article 2(10)); 
16.2. ‘payee’ means a natural or legal person or another organisation or its 
subdivision who are indicated in the payment order as the recipients of funds 
which have been the subject of a payment transaction (Article 2(11)); 
16.3 ‘payment initiation service’ means a service to initiate a payment order at the 
request of the payment service user from a payment account held at another 
payment service provider (Article 2(22)); 
16.4. ‘payment order’ means an instruction by a payer or payee to its payment 
service provider requesting the execution of a payment transaction (Article 2(25)); 
16.5. ‘payment transaction’ means an act, initiated by the payer or on his behalf or 
by the payee, of placing, transferring or withdrawing funds, irrespective of any 
underlying obligations of the payer and the payee (Article 2(26)); 
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16.6 ‘payment account’ means an account held in the name of one or more 
payment service users which is used for the execution of payment transactions 
(Article 2(34)); 
16.7. ‘payment scheme’ has the meaning defined in Regulation (EU) No 260/2012 
of the European Parliament and of the Council of 14 March 2012 establishing 
technical and business requirements for credit transfers and direct debits in euro 
and amending Regulation (EC) No 924/2009 (Article 2(38)); 
16.8. ‘payer’ means a natural or legal person, another organisation or its 
subdivision holding a payment account and allowing payment orders from that 
payment account, or, where there is no payment account, giving payment orders 
(Article 2(40)); 
16.9. ‘direct debit’ means a payment service for debiting a payer’s payment 
account, where a payment transaction is initiated by the payee on the basis of the 
payer’s consent given to the payee, to the payee’s payment service provider or to 
the payer’s own payment service provider (Article 4(60)). 
17 The Law on Payment and the Law on Payment Institutions implement, inter alia, 
Directive (EU) 2015/2366 of the European Parliament and of the Council of 
25 November 2015 on payment services in the internal market, amending 
Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) 
No 1093/2010, and repealing Directive 2007/64 (‘Directive 2015/2366’). 
18 Recital 10 of Directive 2015/2366 provides that that directive introduces a neutral 
definition of acquiring of payment transactions in order to capture not only the 
traditional acquiring models structured around the use of payment cards, but also 
different business models, including those where more than one acquirer is 
involved. 
19 Recital 29 of Directive 2015/2366 provides that payment initiation services enable 
the payment initiation service provider to provide comfort to a payee that the 
payment has been initiated in order to provide an incentive to the payee to release 
the goods or to deliver the service without undue delay. Such services offer a low-
cost solution for both merchants and consumers and provide consumers with a 
possibility to shop online even if they do not possess payment cards. 
20 Recital 31 of Directive 2015/2366 provides that when exclusively providing 
payment initiation services, the payment initiation service provider does not at any 
stage of the payment chain hold the user’s funds. When a payment initiation 
service provider intends to provide payment services in relation to which it holds 
user funds, it should obtain full authorisation for those services. 
21 Point 3 of Article 4 of Directive 2015/2366 defines a payment service as any 
business activity set out in Annex I. That Annex I to Directive 2015/2366 
specifies the following activities: ‘the execution of payment transactions, 
including transfers of funds on a payment account with the user’s payment service 
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provider or with another payment service provider: … execution of direct debits, 
including one-off direct debits’ (paragraph 3(a)); ‘execution of payment 
transactions where the funds are covered by a credit line for a payment service 
user: … execution of direct debits, including one-off direct debits’ 
(paragraph 4(a)); ‘issuing of payment instruments and/or acquiring of payment 
transactions’ (paragraph 5), ‘money remittance’ (paragraph 6) and ‘payment 
initiation services’ (paragraph 7). Accordingly, in the appellant’s case, the 
services provided under the licence fall within the definition of payment services 
under point 3 of Article 4 of Directive 2015/2366. The questions in the present 
case before the Chamber, in extended composition, concern the interpretation of 
European Union law in relation to those payment services. 
22 Under Article 4 of Directive 2015/2366, the following definitions apply: 
22.1. ‘payment institution’ means a legal person that has been granted 
authorisation in accordance with Article 11 to provide and execute payment 
services throughout the Union (Article 4(4)); 
22.2. ‘payment transaction’ means an act, initiated by the payer or on his behalf or 
by the payee, of placing, transferring or withdrawing funds, irrespective of any 
underlying obligations between the payer and the payee (Article 4(5)); 
22.3. ‘payment service provider’ means a body referred to in Article 1(1) or a 
natural or legal person benefiting from an exemption pursuant to Article 32 or 33 
(Article 4 (11)); 
22.4. ‘payment account’ means an account held in the name of one or more 
payment service users which is used for the execution of payment transactions 
(Article 4(12)); 
22.5. ‘payment initiation service’ means a service to initiate a payment order at 
the request of the payment service user with respect to a payment account held at 
another payment service provider (Article 4(15)); 
22.6. ‘payment initiation service provider’ means a payment service provider 
pursuing business activities as referred to in point (7) of Annex I (Article 4(18)); 
22.7. ‘direct debit’ means a payment service for debiting a payer’s payment 
account, where a payment transaction is initiated by the payee on the basis of the 
consent given by the payer to the payee, to the payee’s payment service provider 
or to the payer’s own payment service provider (Article 4(23)); 
22.8. ‘acquiring of payment transactions’ means a payment service provided by a 
payment service provider contracting with a payee to accept and process payment 
transactions, which results in a transfer of funds to the payee (Article 4(44)). 
23 Article 81(3) of Directive 2015/2366 provides that ‘… where the payment 
transaction is initiated by or through the payee, the payment service provider of 
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the payee shall ensure that the full amount of the payment transaction is received 
by the payee’. Article 83(3) of Directive 2015/2366 states that ‘Member States 
shall require the payee’s payment service provider to transmit a payment order 
initiated by or through the payee to the payer’s payment service provider within 
the time limits agreed between the payee and the payment service provider, 
enabling settlement, as far as direct debit is concerned, on the agreed due date’. 
24 Regulation (EU) No 260/2012 of the European Parliament and of the Council of 
14 March 2012 establishing technical and business requirements for credit 
transfers and direct debits in euro and amending Regulation (EC) No 924/2009 
(‘Regulation 260/2012’) ‘lays down rules for credit transfer and direct debit 
transactions denominated in euro within the Union where both the payer’s 
payment service provider and the payee’s payment service provider are located in 
the Union, or where the sole payment service provider (PSP) involved in the 
payment transaction is located in the Union’ (Article 1(1)). That regulation is 
implemented by the Law on Payments. 
25 Article 2 of Regulation No 260/2012 defines the following key terms: 
25.1. ‘“direct debit” means a national or cross-border payment service for debiting 
a payer’s payment account, where a payment transaction is initiated by the payee 
on the basis of the payer’s consent’ (point 2 of Article 2; it should be noted that 
that term is, in essence, defined in a similar manner in Article 4(23) of Directive 
2015/2366 and in Article 2(60) of the Law on Payments); 
25.2. ‘“payer” means a natural or legal person who holds a payment account and 
allows a payment order from that payment account or, where there is no payer’s 
payment account, a natural or legal person who makes a payment order to a 
payee’s payment account’ (point 3 of Article 2); 
25.3. ‘“payee” means a natural or legal person who holds a payment account and 
who is the intended recipient of funds which have been the subject of a payment 
transaction’ (point 4 of Article 2); 
25.4. ‘“payment scheme” means a single set of rules, practices, standards and/or 
implementation guidelines agreed between PSPs for the execution of payment 
transactions across the Union and within Member States, and which is separated 
from any infrastructure or payment system that supports its operation’ (point 7 of 
Article 2); 
25.5. ‘“payment order” means an instruction by a payer or payee to his PSP 
requesting the execution of a payment transaction’ (point 11 of Article 2); 
25.6. ‘“IBAN” means an international payment account number identifier, which 
unambiguously identifies an individual payment account in a Member State, the 
elements of which are specified by the International Organisation for 
Standardisation (ISO)’ (point 15 of Article 2); 
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25.7. ‘“collection” means a part of a direct debit transaction starting from its 
initiation by the payee until its end through the normal debiting of the payer’s 
payment account’ (point 20 of Article 2); 
25.8. ‘“mandate” means the expression of consent and authorisation given by the 
payer to the payee and (directly or indirectly via the payee) to the payer’s PSP to 
allow the payee to initiate a collection for debiting the payer’s specified payment 
account and to allow the payer’s PSP to comply with such instructions’ (point 21 
of Article 2). 
26 Article 5(1) of Regulation 260/2012 provides that ‘PSPs shall carry out credit 
transfer and direct debit transactions in accordance with the following 
requirements: (a) they must use the payment account identifier specified in point 
(1)(a) of the Annex for the identification of payment accounts regardless of the 
location of the PSPs concerned’ (the payment account identifier must be IBAN); 
‘(b) they must use the message formats specified in point (1)(b) of the Annex, 
when transmitting payment transactions to another PSP or via a retail payment 
system’ (the standard for the message format must be ISO 20022 XML); ‘(c) they 
must ensure that payment services users (PSUs) * use the payment account 
identifier specified in point (1)(a) of the Annex for the identification of payment 
accounts, whether the payer’s PSP and the payee’s PSP or the sole PSP in the 
payment transaction are located in the same Member State or in different Member 
States’ (the payment account identifier must be IBAN). 
27 Article 5(3) of Regulation 260/2012 provides that ‘PSPs shall carry out direct 
debits in accordance with the following requirements, subject to any obligation 
laid down in national law implementing Directive 95/46/EC’. Article 5(3)(a) 
provides that ‘the payee’s PSP must ensure that: (i) the payee provides the data 
elements specified in point (3)(a) of the Annex with the first direct debit and one-
off direct debit and with each subsequent payment transaction,) (ii) the payer 
gives consent both to the payee and to the payer’s PSP (directly or indirectly via 
the payee), the mandates, together with later modifications or cancellation, are 
stored by the payee or by a third party on behalf of the payee and the payee is 
informed of this obligation by the PSP in accordance with Articles 41 and 42 of 
Directive 2007/64/EC’. 
As regards the direct debit provider, direct debit, payment initiation and 
acquiring of payment transactions services 
28 In the present case, the circumstances are such that the Company, as the PSP of 
the payee, provides SEPA Direct Debit mandates to the SEPA Direct Debit 
scheme. The appellant submits that in so doing, it instructs the PSP of the end-user 
to collect the funds of the direct debit transaction on behalf of the merchant and 
that SEPA Direct Debit is used merely as a technical solution necessary for the 
 
*  Translator’s note: PSU is defined in point 9 of Article 2 of Regulation 260/2012 as ‘a natural or 
legal person making use of a payment service in the capacity of payer or payee’. 
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Company to be able to provide a payment processing service (provision of a 
SEPA Direct Debit collection service). According to Lietuvos bankas, in so doing, 
the appellant initiates a payment order on the basis of the prior mandate given by 
the payers to the Company’s customers (merchants, payees) for the automatic 
debiting of funds from the payers’ accounts and provides a direct debit service. 
29 The definition of direct debit in point 23 of Article 4 of Directive 2015/2366 and 
point 2 of Article 2 of Regulation No 260/2012 does not specify which payment 
institution is considered to be a direct debit service provider. Therefore, the first 
question in the case is whether only the payer’s PSP, as defined in point 11 of 
Article 4 of Directive 2015/2366, can be regarded as a direct debit service 
provider for the purposes of Directive 2015/2366 and of Regulation 260/2012, as 
it is the only one which can, in principle, debit the payer’s funds (the fact that it is 
only the payer’s PSP which can debit the payer’s funds from the payer’s account 
is also accepted by the respondent, Lietuvos bankas). Where a direct debit service 
involves the PSPs of both the payee and of the payer, the question arises whether 
both of those PSPs are to be regarded as direct debit service providers. 
30 It should be noted that point 13 of Article 4(13) of Directive 2015/2366, point 11 
of Article 2 of Regulation No 260/2012 and Article 2(25) of the Law on Payments 
define a payment order in the same way as an instruction by a payer or payee to its 
payment service provider requesting the execution of a payment transaction. Thus, 
once the payment order is submitted to the PSP, the process of the payment 
transaction starts. 
31 According to the concept of a mandate, as defined in point 21 of Article 2 of 
Regulation (EU) No 260/2012 […] [recurring information], such mandate 
authorises two entities to act in a direct debit legal relationship: it allows the 
payee, through its PSP, to submit a payment instruction to the payer’s PSP and it 
obliges the payer’s PSP to execute the payment by debiting the funds from the 
payer’s account. That also reinforces the presumption that the PSPs of both the 
payer and of the payee provide a direct debit service. However, it is clear from the 
definition of direct debit in point 23 of Article 4 of Directive 2015/2366 that 
consent is given to the payee’s payment service provider or to the payer’s 
payment service provider, that is to say, defined alternatively. 
32 Chapter 7 of the European Payments Council’s SEPA Direct Debit Core Schemes 
Rulebook defines the term ‘direct debit transaction’, namely a direct debit 
transaction, made through the SEPA Direct Debit scheme, as ‘the whole process 
of the execution of a payment made by the use of direct debit, starting from the 
collection initiated by the creditor up to its finality, being or the normal execution 
[the funds are credited to the payee’s payment account], or the reject, or the return 
or the refund of the collection’ [upon receipt of a payer’s instruction to repay the 
funds due to him]. That concept also suggests that direct debit is a complex 
payment transaction and that the PSPs of both the payer and the payee provide a 
direct debit service. 
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33 Second, the case in the main proceedings also raises the question whether the view 
can be taken that the Company does not provide a direct debit service directly, but 
only gives direct debit instructions to banking systems which provide direct debit 
services. In other words, in the circumstances of the case in the main proceedings, 
whether the view can be taken that the Company, as the PSP of the payee, 
transmits the payee’s instructions to the PSP of the payer and receives the funds to 
be debited from the payer’s account, but does not per se carry out the debit and 
does not debit the payer’s account, but only takes the step of initiating the direct 
debit. The question before the Chamber, in extended composition, is whether the 
request to initiate a payment in the case in the main proceedings can be regarded 
as a debit, or whether the request to initiate a payment is merely the transmission 
of a payee’s order and the initiation of the actual debit. Presumably, if the PSP of 
the payee is only involved in the direct debit relationship, but does not provide the 
direct debit service, that could mean that it is not required to hold a direct debit 
licence. However, according to point 20 of Article 2 of [Regulation 260/2012], the 
collection of funds [is] part of a direct debit transaction. The appellant’s General 
Terms and Conditions of Contract state that the Company provides a SEPA direct 
debit collection service to its customers. 
34 Pursuant to Article 5(1) of Regulation No 260/2012, when carrying out direct 
debit transactions, a PSP must ensure that the payment account identifier used by 
the PSU is IBAN. In the case in the main proceedings, the question concerns the 
relevance to the situation in the case in the main proceedings of the fact that the 
Company has created payment accounts in IBAN format for all its customers and 
has assigned an identification number to each customer, but those accounts are 
restricted in their use, since customers do not have access to those accounts. 
35 It has been established in the case-law of the Court of Justice of the European 
Union that point 23 of Article 4 of Directive 2015/2366 expressly envisages the 
execution of direct debits from a payment account, initiated by the payee on the 
basis of the consent given to that payee by the payer. The proper execution of such 
a payment transaction presupposes that the funds necessary for that transaction are 
available, in advance, on the payer’s payment account (judgment of 22 February 
2024, C-661/22, [ABC Projektai], EU:C:2024:148, paragraph 39). 
36 The CJEU has ruled that Article 2(1) of Directive 2007/64/EC of the European 
Parliament and of the Council of 13 November 2007 on payment services in the 
internal market, amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 
2006/48/EC and repealing Directive 97/5/EC, must be interpreted to the effect that 
the notion of ‘payment services’, for the purposes of that provision, includes the 
execution of direct debits, initiated by the payee, on a payment account of which it 
is not the holder, where the holder of the account thus debited does not consent to 
those direct debits (judgment of 11 April 2019, C-295/18, [Mediterranean 
Shipping Company (Portugal) – Agentes de Navegaçào], EU:C:2019:320). 
37 The term ‘direct debit’ in point 2 of Article 2 of Regulation No 260/2012 has been 
interpreted by the CJEU in its judgment of 5 September 2019 in C-28/18, [Verein 
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für Konsumenteninformation], EU:C:2019:673. However, the CJEU case-law does 
not provide a more detailed interpretation of the direct debit service. 
38 In the light of the foregoing, the question for the Chamber, in extended 
composition, is whether, in circumstances such as those of the case in the main 
proceedings, where a payment institution such as the Company, the PSP of the 
payee, transmits direct debit instructions, but does not carry out direct debit 
transactions, but collects funds on the basis of the prior consent of the payers 
given to customers (payees), it provides a direct debit service and whether it is to 
be regarded as a provider of direct debit services. 
39 If the Company is not to be regarded as a direct debit provider and does not 
provide direct debit services, the Chamber, in extended composition, has further 
questions concerning the nature of the payment services provided by the 
Company. 
40 Third, the Company is licensed to provide a payment transaction processing 
service (point 44 of Article 4 of Directive 2015/2366, paragraph 5 of Annex I, and 
Articles 2(10) and 5(5) of the Law on Payments, that is to say, acquiring of 
payment transactions). The funds collected from the restricted use accounts 
opened with the Company for customers (merchants, payees) are subsequently 
transferred at various intervals to the payment accounts specified by the 
Company’s customers (merchants, payees) with other payment service providers. 
According to the Company, SEPA Direct Debit is merely a technical solution 
necessary for the Company to provide a payment processing service. The question 
for the Chamber, in extended composition, is therefore whether direct debit can be 
used as a technical solution for providing a payment transaction processing 
service and whether, in circumstances such as those in the case in the main 
proceedings, where a payment institution transmits direct debit instructions and 
collects funds, subsequently transferring those funds to customers’ accounts held 
with other payment service providers, the Company (payment institution) can be 
regarded as providing a payment transaction processing service. 
41 Fourth, according to the facts of the case, it is the customer (merchant) of the 
Company (payment institution), the ultimate payee of the funds, who initiates the 
debit of the funds from the payer’s (buyer’s) account and instructs the Company 
to execute the payment transaction. If the Company does not provide a payment 
transaction processing service, the question to be answered is whether such a 
service, which initiates direct debit and where the PSP only transmits a debit 
request of its customer (payee), can be regarded as a payment initiation service, as 
defined in point 15 of Article 4 of Directive 2015/2366 and referred to in 
paragraph 7 of Annex I (a service to initiate a payment order at the request of the 
payment service user with respect to a payment account held at another payment 
service provider). Recital 31 of Directive 2015/2366 points out that when a 
payment initiation service provider intends to provide payment services in relation 
to which it holds user funds, it should obtain full authorisation for those services. 
Therefore, if the Company is not regarded as a direct debit provider and does not 
ALTERNATIVE PAYMENTS 
 
13 
provide direct debit and payment transaction processing services, the question for 
the Chamber, in extended composition, is whether, in circumstances such as those 
in the case in the main proceedings, a payment institution, as the PSP of the payee, 
which initiates a direct debit service on the basis of the payee’s instruction, but 
which does not carry out direct debit transactions itself and collects funds on the 
basis of the prior consent of the payers given to customers (payees), is providing a 
payment initiation service. 
III. 
42 […] [obligation to apply pursuant to the third paragraph of Article 267 TFEU] 
43 In the circumstances of the present case, in order to resolve the doubts which have 
arisen regarding the interpretation and application of the provisions of EU law 
relevant to the legal relationships at issue in the present dispute, it is appropriate to 
request the Court of Justice of the European Union to interpret the EU provisions 
in question. The answer to the questions referred to in the operative part of the 
present Order are of fundamental importance for the case in the main proceedings, 
since, for the purposes of ensuring the supremacy of EU law, it will enable, inter 
alia, an unambiguous and clear decision to be taken as to which PSP is to be 
regarded as the provider of direct debit services and which payment services 
provided by a payment institution are to be regarded as direct debit, payment 
initiation or acquiring of payment transactions. Moreover, that will ensure the 
case-law of national courts is uniform. The highest courts of the Republic of 
Lithuania have not established any case-law on that issue, therefore the case in the 
main proceedings constitutes a practical precedent. A reply to the question 
submitted to the Court of Justice of the European Union is of fundamental 
significance for the resolution of the case in the main proceedings, as it would 
make it possible, for the purposes of ensuring the effectiveness of EU law, to 
interpret the national legal provisions defining the appellant’s duties in connection 
with the provision of payment services and the application of those provisions to 
the legal relations in the context of a dispute. 
In the light of the foregoing considerations […] [reference to provisions of 
procedural law] […] the Chamber, in extended composition, 
orders as follows: 
[…] [standard procedural wording] 
The following questions are referred to the Court of Justice of the European Union 
for a preliminary ruling: 
1. Are point 2 of Article 2 of Regulation (EU) No 260/2012 of the European 
Parliament and of the Council of 14 March 2012 establishing technical and 
business requirements for credit transfers and direct debits in euro and amending 
Regulation (EC) No 924/2009 and point 23 of Article 4, paragraphs 3(a) and 4(a) 
of Annex I to Directive (EU) 2015/2366 of the European Parliament and of the 
REQUEST FOR A PRELIMINARY RULING OF 9. 4. 2025 – CASE C-274/25 
 
14  
Council of 25 November 2015 on payment services in the internal market, 
amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation 
(EU) No 1093/2010, and repealing Directive 2007/64/EC, to be interpreted as 
meaning that only the payment service provider of the payer is to be regarded as 
the provider of the direct debit service, or is the service provided by the payment 
service provider of both the payer and the payee? 
2. Are point 2 of Article 2 of Regulation (EC) No 260/2012 and point 23 of 
Article 4 of Directive (EU) 2015/2366, and paragraphs 3(a) and 4(a) of Annex I to 
that directive, in circumstances such as those in the case in the main proceedings, 
to be interpreted as meaning that a payment institution, as the payment service 
provider of the payee, which transmits direct debit instructions, but does not itself 
carry out debit transactions directly and collects funds on the basis of the prior 
consents of the payers given to customers (payees) and places them into accounts 
with restricted functionality, is providing a direct debit service? 
3. If the answer to the first question is that the payment service provider of the 
payee is not considered to be a direct debit service provider, and the answer to the 
second question is in the negative, are point 44 of Article 4 of Directive (EU) 
2015/2366 and paragraph 5 of Annex I to that directive to be interpreted, in 
circumstances such as those in the case in the main proceedings, as meaning that a 
payment institution, as the payment service provider of the payee, which transmits 
direct debit instructions, but does not itself carry out debit transactions directly 
and collects funds on the basis of the prior consents of the payers given to 
customers (payees), and subsequently transfers those funds into customers’ 
accounts held with other payment service providers, is providing a payment 
transaction processing service? 
4. If the answer to the third question is in the negative, are point 15 of Article 4 
of Directive 2015/2366 and paragraph 7 of Annex I to that directive to be 
interpreted, in circumstances such as those in the case in the main proceedings, as 
meaning that a payment institution, as the payment service provider of the payee, 
which initiates a direct debit service on the basis of the payee’s instruction, but 
which does not carry out direct debit transactions itself and collects funds on the 
basis of the prior consents of the payers given to customers (payees), is to be 
regarded as providing a payment initiation service? 
[…] 
[…] [standard procedural wording] 
[…] 
[composition of the court]