Retail Payment Strategy

The primary goal of the Eurosystem’s retail payments strategy is to support the creation of pan-European solutions for retail payments at the POI, whether at the physical or electronic point of sale. There is currently no European solution nor a pan-European scheme for POI payments, while there is strong reliance on international card schemes. Although digital wallets are popular with users, they remain fragmented and face similar shortcomings.

The pan-European solutions supported by the Eurosystem should fulfil five key objectives:

1. pan-European reach and customer experience;
2. convenience and low cost;
3. safety and efficiency;
4. European brand and governance;
5. global acceptance (in the long run).

Finally, pan-European retail payment solutions at the POI should support the digital euro and be based on a different processing infrastructure from card payments.

The second major goal of the Eurosystem’s retail payments strategy is to strengthen SEPA, through the expansion and adoption by the market of its set of technical functionalities. To this end, Regulation (EU) 2024/886 has helped to enhance the factors contributing to the further deployment of instant payments. The full adoption of the SCT Inst scheme by payment service providers is the key pillar for instant payments to become available to all European citizens and the new normal for retail payments.

The introduction of a digital euro as electronic legal tender would coincide with the increase in the total means of digital retail payments in the euro area. In fact, private retail payment solutions are expected to achieve a pan-European reach and expand their use cases in the new ecosystem.

In recent years, significant progress has been made in improving the cyber resilience of payment systems and market infrastructures. However, the resilience of retail payments could be further improved by ensuring the availability of a fallback option that does not rely fully on the same technology.

Technological advancements and digital innovation have the potential to improve the efficiency and safety of cross-border payments, for both retail and wholesale payments. In contrast to payments within the EU, payments that cross the EU border are often slow, expensive and complex, making it hard for end users to easily send and receive money.

The Eurosystem’s retail payments strategy supports efficiency and innovation in the financial system by ensuring a level playing field across Europe for the provision of automated and improved financial services by credit institutions and fintech companies.

In this context, innovation is fostered under the European regulatory framework in the following areas:

1. conditional direct access to payment systems for non-bank payment service providers, such as payment institutions and electronic money institutions;
2. provision of a European Digital Identity Wallet (EUDIW) to EU citizens and businesses by all Member States, ensuring interoperability and cross-border accessibility across Europe;
3. use of digital identification, facilitating electronic identity (eID) and electronic signature (eSignature) services for individuals and businesses, expanding the availability of digital payment solutions in the private sector and enhancing the security of electronic retail payments in the European payments ecosystem.

Finally, the Eurosystem’s retail payments strategy encompasses work on the environmental sustainability of payment transactions and infrastructures, as well as a study on the environmental footprint of electronic retail payments. The Eurosystem also works on ensuring that all Europeans, regardless of their age or living in remote areas, have access to safe, efficient and convenient means of payment.