The EU retail payments compass: Let's lead the way
We’re undergoing a global transformation marked by competition for resources, value chain shifts, geopolitical tensions, humanitarian crises, climate change and demographic challenges. This shifting landscape is forcing EU leaders and businesses to rethink their strategies.
The Letta and Draghi reports in particular urged the EU and its Member States to act – rethink governance, remove barriers to innovation, address productivity gaps, simplify legislation and ease compliance burdens.
But if the EU wants to face to these new challenges and emerge stronger, its financial sector needs to be resilient and competitive – and the retail payments system is a crucial part of the financial sector. It underpins economic activity, facilitates cross-border transactions and supports financial stability. In short, it’s one of the foundations of Europe’s digital and economic sovereignty.
"Europe is at a defining moment. It must seize this opportunity to reaffirm its leadership in payments, strengthening its foundations of innovation, security, and resilience. With a rich ecosystem of European players, innovative solutions, and an expanding talent pool, Europe has all the ingredients to shape a payment ecosystem that serves European consumers, businesses, and institutions – by design and by purpose. This is not just a matter of progress; it is about securing Europe’s sovereignty and autonomy over one of the most critical industries of the digital economy. The urgency could not be greater."
Madalena Cascais Tomé, Chair of the Task Force and CEO, SIBS Group
Formed in September 2024, this CEPS-ECRI Task Force brought together a group of stakeholders in the payment sector to take part in in-depth discussions. The report calls for an agenda that focuses on:
- A new European payments policy to provide a strategic vision and simpler and more harmonised regulation.
- Support strategic autonomy and competitiveness so that the most-promising fintech developments reach EU and global scale.
- Encourage interoperability and standardisation.
- Foster innovation and new technologies by prioritising R&D in areas such as account-to-account transfers, security, and analytics.
- Bolster data privacy and governance by providing clear definitions in FIDA for the data covered and for FISPs.
- Promote transparent, comparable, and equitable cost structures to increase the adoption of modern payment methods.
- Strengthen fraud prevention and consumer protection.
- Maximize the digital euro use of existing European technical, operational, and financial infrastructure for instant payments, to ensure its efficient implementation and avoid duplication of resources and investment.
- Enhance consumer and merchant awareness, knowledge, and confidence.
Judith Arnal is Senior Research Fellow at ECRI and CEPS. Fredrik Andersson is Researcher at ECRI and CEPS. Beatriz Pozo is Financial Markets and Institutions Unit Coordinator at CEPS.
