Every payments industry veteran learns the same rule about card payments: when a dispute arrives, the acquirer settles the argument. The chargeback rulebook is forty years old, and the roles of buyer, merchant, acquirer, and scheme are written into every card payments contract. Pay by Bank has none of this. When a Pay by Bank transaction goes wrong, the industry currently has no single answer to the question of who settles the dispute. That is the regulatory question Vladyslav Kolodistyi from PayAdmit spends most of his week discussing, because it will shape every A2A payments business model for the next decade.
The gap the UK and EU regulators are filling
Card payments have a settled dispute architecture because Visa and Mastercard built it. Pay by Bank has no equivalent private-sector rulebook because Open Banking payments are a public infrastructure sitting on top of banking rails that were never designed for retail dispute handling. The result is a category where the buyer, the merchant, the acquirer, the payments processor, the payments partner, the sending bank, and the receiving bank all have plausible claims about who owes what when Pay by Bank goes wrong.
Vladyslav Kolodistyi maps the current state simply. "In card payments, the acquirer settles disputes because the scheme rulebook says so. In Pay by Bank today, nobody settles disputes because no rulebook exists. The regulators are stepping in because the payments industry has not written one on its own, and Open Banking payments cannot scale to serious purchase flows without it."
The UK Payment Systems Regulator moved first. Since October 2024, the UK requires mandatory reimbursement for authorised push payment fraud across most Open Banking payments rails. The receiving bank and the sending bank split the loss on covered Open Banking payments fraud up to a defined cap. It does not cover the full range of Pay by Bank disputes, but Vladyslav notes it establishes a foundational principle: Open Banking payments liability sits with the banks, not the buyer.
What the European Commission is building for Open Banking payments
The European Commission's Payment Services Regulation, currently working through Parliament, extends the UK approach across the single market and pushes further. The regulation introduces a broader liability regime for Open Banking payments that covers not just fraud but also failed delivery, unauthorised debits, and disputes arising from consent scope violations. Vladyslav Kolodistyi has read every draft. "The EU is essentially writing a European chargeback right for Open Banking payments. It will not be called that, but that is what it is."
Three provisions in the emerging EU framework matter most for anyone building Pay by Bank infrastructure. First, the receiving bank inherits an obligation to hold funds during the dispute intake window, similar to how card payments settlement funds get held pending chargeback resolution. Second, the sending bank inherits an obligation to route dispute notifications to the receiving bank within defined SLAs. Third, the Pay by Bank operator or scheme takes on an obligation to publish dispute statistics, so regulators can monitor A2A payments dispute rates over time.
Vladyslav Kolodistyi argues these three provisions look modest but change the industry. "Each of these obligations pushes Pay by Bank one step closer to card payments parity on the buyer side, without requiring the industry to build a full chargeback scheme from scratch."
How the industry is responding on Open Banking payments
The regulatory rules are only half the story. Vladyslav Kolodistyi tracks the industry response in parallel because rules without operational infrastructure do not protect anyone. His view is that Pay by Bank scheme operators are moving on three fronts:
Building shared A2A dispute infrastructure. Bank consortia in the UK and EU are jointly funding shared Pay by Bank dispute platforms that let sending and receiving banks in real payments time exchange dispute notifications in real time. This is the operational spine the regulators assume exists.
Publishing dispute standards. Open Banking scheme operators are publishing evidence schemas for Pay by Bank disputes. Merchants know what proof of delivery, proof of authorisation, and proof of consent look like across every A2A rail.
Building consumer-facing dispute channels. Vladyslav Kolodistyi keeps repeating that this is where Pay by Bank will win or lose consumer trust. The Open Banking payments dispute channel has to feel as simple as a card dispute button in a mobile app.
Creating cross-border coordination. Open Banking payments cross borders. The Pay by Bank dispute rules cannot stop at national borders. UK and EU regulators are already discussing how a Pay by Bank dispute originating in Ireland but hitting a UK receiving bank gets settled.
Vladyslav Kolodistyi believes the coordination question is the most under-discussed part of the whole Pay by Bank regulatory frontier. "Every regulator focuses on their own border. Open Banking payments do not respect borders. Whoever solves cross-border Pay by Bank dispute coordination first will define the shape of the whole global A2A payments market."
Where Open Banking payments schemes fit in the emerging framework
Vladyslav sees a critical role for Open Banking payments schemes that sits between the regulator and the individual bank. Open Banking scheme operators in the UK and EU are being asked to enforce the emerging dispute framework across participants, publish operational SLAs, and coordinate cross-border A2A payments incidents. That is a substantial expansion of the traditional Open Banking scheme mandate.
"The Open Banking payments schemes have to become dispute enforcement bodies," Vladyslav says. "That is not what they were originally designed for, but it is what the regulators expect them to become." The transition is happening, but Vladyslav notes that the pace varies. UK Open Banking scheme operators are moving faster than their EU counterparts, partly because the UK PSR guidance is more advanced and partly because the UK Open Banking payments market is more concentrated.
Vladyslav argues merchants should track scheme-level Open Banking payments guidance as carefully as they track regulator-level rules. "The regulatory principles are set at the top. The operational rules are set at the scheme level. Merchants that only follow the regulator will miss half the Pay by Bank compliance picture."
Where merchants sit in the new Pay by Bank liability model
The regulatory shift matters most to merchants because it changes their operational obligations. In card payments, merchants have known for decades what they owe when a chargeback lands: proof of delivery, proof of authorisation, and proof of goods. Pay by Bank has never given merchants a comparable checklist, but the emerging regulatory framework is about to.
Vladyslav Kolodistyi argues merchants that treat the emerging Pay by Bank rules as pure compliance overhead will miss the point. "The merchants that read the UK PSR guidance and the EU regulation as design specifications will build better Pay by Bank checkouts. The ones that read them as tick-box exercises will get outcompeted by the ones that treat them as product opportunities."
Vladyslav Kolodistyi points out that the emerging Pay by Bank rules also settle a long-running argument about consent scope. Open Banking payments require explicit consent, and the scope of that consent has been debated since Open Banking launched. The new rules clarify that consent has to be granular, revocable, and audited, which changes how every Pay by Bank checkout has to be built.
What comes next in A2A payments regulation
Vladyslav Kolodistyi expects three developments to shape the next twenty-four months. UK PSR guidance will expand beyond APP fraud to cover a broader set of Pay by Bank disputes. The EU regulation will finalise and enter transition, giving Open Banking payments participants a defined timeline to build operational compliance. And bilateral coordination between UK and EU regulators will formalise cross-border A2A payments dispute handling.
"The regulators are moving faster than most Pay by Bank operators expected," Vladyslav Kolodistyi says. "Every Open Banking payments participant that treats this as a two-year problem will be caught flat-footed. It is a twelve-month problem."
For merchants, the practical implication is straightforward. Pay by Bank dispute infrastructure has to be built now, in parallel with the regulatory finalisation, not after. For fintech operators, the strategic implication is that A2A payments platforms with mature dispute tooling will command a real premium against those without.
PayAdmit works with fintech operators tracking the Open Banking payments regulatory frontier, providing white-label Pay by Bank infrastructure that adapts as the UK PSR and EU rules finalise.
Vladyslav Kolodistyi leads payments strategy at PayAdmit, tracking Pay by Bank regulation across the UK PSR, FCA, and the European Commission. “Follow me on LinkedIn for weekly analysis on Open Banking payments rules and the A2A payments regulatory frontier.”
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