The European Commission has published a Communication on its EU retail payments strategy for the coming years. The payments sector has experienced significant change in recent years. Retail payments are increasingly dematerialized and disintermediated, with large technology companies playing a more significant part in the payments sector. The EU payments market is also largely fragmented along national borders, leading to a small number of large firms providing cross-border services and inhibiting domestic FinTechs. The Commission's strategic objective is to establish a clear EU policy framework for retail payments that manages the risk of inconsistencies and market fragmentation across the EU. The Retail Payments Strategy is based on four key Pillars:
- Pillar 1 – Increasingly digital and instant payment solutions with pan-European reach. The Commission's proposed actions include enabling the full uptake of instant payments in the EU by the end of 2021, increasing customers' trust in instant payments, introducing EU payment solutions that work cross-border, exploiting the potential of electronic identity for customer authentication, improving the acceptance of digital payments and maintaining the availability of central bank money.
- Pillar 2 – Innovative and competitive retail payments markets. The Commission's proposed actions include conducting a review of the application and impact of the revised Payment Services Directive at the end of 2021, setting out a proposal for a new 'Open Finance' framework by mid-2022, ensuring a high level of security for retail payments in Europe, fostering consumer protection (including re-examining the legal limits on contactless payments) and future-proofing supervision and oversight of the payments ecosystem.
- Pillar 3 - Efficient and interoperable retail payment systems and other support infrastructures. The Commission's proposed actions for this objective include enhancing interoperable payment systems and infrastructures, considering an extension of the Settlement Finality Directive to include e-money and payment institutions and considering legislation to preserve a right of access to necessary technical infrastructures for market participants.
- Pillar 4 - Efficient international payments, including remittances. This will include improved links between EU and third country payment systems, the implementation of global international standards to facilitate richer data in payment messages and a reassessment by the Commission of certain aspects of the revised Payment Services Directive including whether the transparency of cross-border international transactions should be improved.
The Commission notes that the COVID-19 pandemic has reinforced the shift to digital payments and confirmed the importance of safe and accessible remote and face-to-face payment methods. The Commission has also published a summary of the responses it received to its consultation on the proposed retail payments strategy, which ran between April 3, 2020 and June 26, 2020.
View the Commission's EU Retail Payments Strategy
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View the responses to the Commission's consultation
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View details of the Commission's consultation on its Retail Payments Strategy
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