The European Union’s retail payments landscape is undergoing rapid transformation but remains hampered by fragmented regulation, uneven competition and emerging fraud risks. This paper examines four central dimensions and sets out targeted policy recommendations. First, on regulation and compliance, the Payment Services Directive 3 (PSD3) and the Payment Services Regulation (PSR) should move beyond formal harmonisation by simplifying legal texts, avoiding excessive delegation to technical standards and fostering supervisory convergence to create a truly integrated market. Secondly, to strengthen resilience and competitiveness, policy should prioritise interoperability among private pan-European initiatives such as Wero and EuroPA, while ensuring complementarities with public projects like the digital euro, supported by common standards and settlement infrastructure. Thirdly, fraud prevention requires more dynamic transaction monitoring, multilayered defences, proportionate liability-sharing and EU-wide intelligence-sharing mechanisms aligned with data protection rules. Finally, fair access to enabling technologies such as near-field communication and secure elements must be guaranteed through transparent frameworks, proportionate fee structures and incentives for cross-platform interoperability. Taken together, these recommendations provide a strategic policy agenda to reinforce innovation, security and integration in EU retail payments, underpinning both consumer trust and Europe’s digital economy. This article is also included in the Business & Management Collection which can be accessed at http://hstalks/business.
Arnal et al. (2025) studied this question.