When you make a payment online, instead of having to input the payment details into the online banking tool provided by your bank, typing in the amount, the recipient’s account details, etc., you access your online banking tool via the third party service provider, which provides the transaction-related data for you.
Simultaneously, the e-commerce merchant, or online retailer, receives an automatic payment notification that the payment has been completed successfully. While in some European countries, for example in the Netherlands, banks began offering these payment initiation services, in other countries, such as Germany, new providers entered the market. Legally, these third party service providers have been operating in a grey zone.