Open banking is easy to launch. Refunds are where it gets painful.

Everyone is racing to turn on payment initiation. SEPA Instant is live, variable recurring payments are rolling out, and the merchant acquiring side is finally treating A2A payments as a serious alternative to card schemes.

But almost nobody is talking about the operational hangover.

When a customer wants their money back, there is no standardised refund rail for open banking. No scheme rules. No chargeback framework. No clear liability model. Just a manual process that lands squarely on your ops team.

For PSPs, this is a silent margin killer. The payment infrastructure gets the headlines, but the cost of exception handling is what actually hits your P&L. Every refund request becomes a ticket, a follow-up email, and a reconciliation headache. Fraud operations get dragged into disputes that have no clear protocol.

For merchants, the problem is even more direct. They moved to open banking to save on interchange, only to discover that their customer support team is now manually processing refunds that used to be automated through the card networks.

The real issue is that we built the front door of open banking before designing the back office. Payment initiation is a solved problem. The refund, the reconciliation, and the dispute workflow are still bespoke integrations that every PSP has to stitch together themselves.

Frederic Yves Michel NOEL views this not as a regulatory gap, but as a competitive opportunity. The PSP that builds a clean, automated refund layer for A2A payments will win the merchant acquiring battle before the next wave of regulation forces everyone to catch up.

For PSPs already offering open banking payments, where does the operational cost actually hurt most: refunds, reconciliation, or fraud disputes?

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