When it comes to B2B payments in Germany, two factors are particularly important: security and efficiency. While modern payment APIs (application program interfaces) are considered the future of banking, many companies continue to rely on the EBICS system—a standard that has stood the test of time.

But what exactly is EBICS? Where is it used, what are the requirements, and when does it make sense to implement it? In this article, we'll take a look at the strengths and limitations of one of the mainstays of European payments.

What’s in this article?

• What is EBICS?
  
• Where is EBICS used?
  
• What are the technical and operational requirements for EBICS?
  
• What are the pros and cons compared to modern API solutions?
  
• When does it make sense to use EBICS?
  

What is EBICS?

EBICS (electronic banking internet communication standard) is a widely established European procedure for the secure transfer of payment data between businesses and banks.

EBICS has a particularly strong foothold in corporate banking. The standard facilitates encrypted communication over the internet, without relying on proprietary bank software. This means businesses can transfer payment orders to their bank directly from their enterprise resource planning (ERP) system, digitized accounting system, or treasury management system (TMS), with automated retrieval of account information.

How EBICS came to be

EBICS was developed in Germany in the mid-2000s as a way of updating corporate payments to meet the demands of the digital age and phasing out antiquated, proprietary systems like FTAM (file transfer, access, and management), a standardized data communication protocol for secure file transfers.

The EBICS project was spearheaded by the German banking associations, as they wanted to create a standard that was independent of any one particular bank and based on modern internet technologies. The focus was on high security through strong cryptography, the possibility of automation via direct system connections, and a clear separation of user roles to comply with regulatory requirements.

Later versions of EBICS, versions 2.0 and 3.0, further harmonized the mechanism, and expanded access to the whole of Europe, largely through the merging of German and French specifications as a part of the SEPA (Single Euro Payments Area) initiative. Even today, EBICS is being further developed as a way of guaranteeing a reliable, future-ready, international standard for electronic payments.

Where is EBICS used?

EBICS is used for the secure, automated exchange of payment data between businesses and banks. This includes bank transfers, direct debits, and retrieving account information. The standard is most widely used in B2B banking, where companies have a large number of payments to process, and must meet regulatory requirements for the approval processes. By directly connecting ERP, payroll, or accounting systems to the bank, EBICS facilitates efficient, error-free processes throughout the entire payment flow. Typical EBICS uses include:

• Payroll: Automated transfers made to the bank as part of monthly payroll. EBICS allows for reliable processing of payments for large numbers of employees without manual intervention.

• Supplier and creditor payments: Wire transfer runs from accounting or the ERP system. This reduces the error rate compared with making individual payments, and it speeds up overall invoice processing.

• SEPA direct debits: For regular payment collection. This enables companies to ensure stable and predictable incoming payments.

• Multibanking and financial overview: View account transactions and balances across multiple banks. This allows businesses to manage their liquidity centrally, and gives them greater transparency across all accounts.

Typical industries that work with EBICS

In practice, EBICS is primarily used by industries that regularly process large numbers of automated payments or manage numerous bank accounts. These include in particular:

• Energy and utility companies: Municipal utilities, energy providers, and water companies frequently process thousands of SEPA direct debits every month and require reliable automation in order to avoid missed payments.

• Insurers and financial service providers: Regular contributions and premium debits, as well as complex payment processes in the event of a claim, make EBICS a stable foundation for payment processing.

• Industrial and manufacturing enterprises: Supplier and creditor payments are frequently made in large volumes and sometimes internationally, making security and multibanking integral.

• Trading companies and logistics firms: Lots of suppliers, branch accounts, and automated payment flows require a scalable and robust bank connection.

• Public authorities and institutes: Administrative processes and budgetary resources require maximum security, traceability, and clear separation of roles for payment approvals.

EBICS is particularly useful for these sectors, as it’s stable, has undergone regulatory review, and is designed for large volumes of data.

Alternatives to EBICS

While EBICS is in widespread use for B2B transactions in Germany, there are several alternatives that might be better suited to businesses, depending on their needs.

Modern banking APIs

An alternative to EBICS are banking APIs, which were created as part of PSD2 (the revised Payment Services Directive) and open banking. They facilitate direct communication (usually in real time) between software solutions and banks—all without additional banking software. For digital business models, ecommerce, or SaaS platforms, they provide the flexibility to access account information or execute payments instantly.

SWIFT and host-to-host connections

Businesses with an international reach can also look into SWIFT (Society for Worldwide Interbank Financial Telecommunications) and host-to-host connections. Both solutions support globally standardized payment processes, and are particularly well suited to complex treasury structures with lots of overseas accounts. That said, they are more expensive and time-consuming to implement, and their costs tend to exceed those for EBICS.

Stripe: A modern all-in-one solution

A third option is a payment service provider (PSP) that brings together multiple payment types, fraud prevention, and payouts, providing access to the full package via a single interface. Stripe goes even further: Businesses integrate their payments, payouts, and global payment methods via a modern API, and automate complex flows directly within their systems.

SaaS platforms and marketplaces use Stripe Connect to orchestrate bulk payments, integrate onboarding processes, and manage cash flows between multiple parties intelligently. Thanks to rapid onboarding via hosted or integrable components, businesses can often go live in a matter of weeks—without high up-front costs or long development times. They also get access to tools for margin reporting, risk management, tax forms, onboarding compliance, and automated tax calculation. Interested parties can even unlock new sources of revenue through transaction fees, instant payouts, financing solutions, or corporate cards.

What are the technical and operational requirements for EBICS?

For a business to be able to use EBICS, it has to meet both the technical and operational requirements. These ensure that payments can be processed securely, compliantly, and fully digitally, without disruptions.

Technical requirements

• EBICS-capable bank connection
  Any business wanting to use EBICS must use a bank that supports EBICS. While this is standard practice at most banks in Germany, there can be limitations, especially when it comes to international institutions. Therefore, before you start, you should check which formats and EBICS versions your bank offers, and whether these meet your company’s needs.

• EBICS-certified software
  EBICS requires software that can implement the EBICS technical standard (e.g., accounting, ERP, or treasury systems). This software allows you to generate, encrypt, and transmit payment files, as well as retrieve account statements and transaction data.

• Key pair for authentication
  EBICS uses digital certificates and key pairs to guarantee that communication is secure. These key pairs and certificates are issued to individual users or functional roles. They protect the integrity of the data and also identify the client to the bank. The generation and administration of these keys is a core component of the EBICS setup.

• Secure network and system environment
  Since sensitive financial data is being transferred, the IT infrastructure needs to be properly protected. This includes secure servers, clear network access, regular updates, and a reliable backup and monitoring concept. Integration into existing systems also needs to be tested before launch to ensure smooth operations.

Operational requirements

• Rights and user management
  EBICS generally requires a clear separation of responsibilities. Many banks require application of the four-eyes principle, so roles such as “creator,” “approver,” and “sender” cannot be assigned to a single person. Businesses therefore need clear, auditable user management that is documented and regularly reviewed.

• Regular key management
  Because EBICS is based on cryptographic keys, these keys need to be stored securely, renewed regularly, and updated or revoked any time there are personnel changes. Proper key management at all times is foundational to the integrity of the system and the authorization structure.

• Data control and auditability
  Businesses bear full responsibility for the payment data they transmit. Processes and systems should therefore be designed so that payment approvals can be traced to a source at all times. Internal reviews or external audits—by statutory auditors, for example—are standard practice for ensuring compliance with regulatory requirements.

What are the pros and cons compared to modern API solutions?

While EBICS remains a central standard in B2B payments, modern banking APIs are gaining traction. Which solution makes sense for a particular business depends on that business’s requirements, and the specific use case.

EBICS is predominantly designed for high security requirements, statutory regulations, and large payment volumes in the B2B sector. APIs, on the other hand, allow for real-time communication, flexible integrations, and digital business models. In practice, both mechanisms are frequently applied side-by-side, with EBICS handling stable batch processing in the background, while APIs facilitate dynamic processes and banking functions in real time. Many companies, therefore, employ a combination of both technologies, depending on their system landscape, speed, and the level of automation they require.

When does it make sense to use EBICS?

Whether or not it makes sense for your business to use EBICS depends a lot on your payment volumes, compliance requirements, and system landscape. In certain scenarios, the standard has clear strengths.

EBICS makes a lot of sense if:

• You’re processing multiple or recurring payments through automated means (e.g., more than 1,000 payments per month)
  
• Compliance and security are a top priority (e.g., the four-eyes principle)
  
• Integration into ERP or accounting systems is important
  
• You’re looking to connect to multiple banks using a multibanking approach
  
• You have a high volume of direct debits (e.g., for energy suppliers or leasing companies)
  

EBICS is less ideal for:

• Startups with low payment volumes
  
• Ecommerce businesses that require real-time transactions
  
• Platforms that collect payments from end customers