An Evolving Payments Landscape: Towards Building EU Sovereignty?

The LUXHUB Team recently met with Andrea Toucinho (Director of Studies, Prospective and Training at Partelya Consulting and a renowned payments expert) to discuss the current EU payments landscape. During this interview, we focused on key regulations that have shaped the sector, the role of regulators, the European approach to innovation, and the EU’s ongoing efforts to build a robust and sovereign payments ecosystem.

Out of the numerous payments-related regulations and directives introduced in recent years, which one do you consider the most important and successful to date?

First of all, it is important to note that each regulation is connected to a broader set of legal texts. And we must also consider those that may seem less related to the financial industry but have had a tangible operational impact — such as the GDPR (General Data Protection Regulation), for instance.

That being said, the Second Payment Services Directive (PSD2) stands out as one of the most emblematic texts in the payments ecosystem. It has had a positive impact, notably through the advent of Strong Customer Authentication (SCA). According to a previous report, SCA led to a 20% decrease in online payment fraud in France. The report even notes that “fraud is mastered and stable,” a direct outcome of PSD2.

PSD2 also fostered greater collaboration within the ecosystem, which aligns with the evolution of payment methods and their use. In France, even if the implementation of SCA and its responsibility falls to the issuer of the payment, an actual collaboration started between banks and merchants, in a fluid and smooth way, with no additional disruption or interference on the payment journey.

Most importantly, PSD2 paved the way for Open Banking. While France was initially less proactive, countries such as Spain, Portugal, and Luxembourg adopted a more opportunistic approach, strengthening collaboration across stakeholders in this rapidly expanding and ever-growing ecosystem.

Compared to other regions that follow a market-driven rather than a regulation-led strategy, would you say the EU has chosen the right path? How can it differentiate itself?

The EU’s regulation-driven approach makes sense: Europe remains a mosaic of local habits, practices and specificities. The main goal of these regulations is to harmonize the payments sector. It will benefit both providers of payment services (banks, PSPs) and users (individuals but also merchants that now have well defined cross-border strategies). In other words, harmonized rules and standards act as a unifying thread across Europe.

This approach is relevant for the EU as it sets the right balance between innovation, security, and consumer protection, which is a key strength for Europe, compared to other regions. It has led to the development of Open Banking (through PSD2), the creation of new statuses such as Payment Initiation Service Provider (PISP) and Account Information Service Provider (AISP), and resulting in reinforced security via SCA.

On the one hand, it supports the development of the payments sector, and on the other hand, it is a safeguard in terms of security and therefore protects the consumer.

Additionally, these frameworks establish a level playing field among all actors – banks, Fintech companies, and other external players – by imposing shared responsibilities around security and data protection.

Finally, it is interesting to look at the broader influence of EU regulations. For instance, the GDPR, designed to protect consumers’ data, has inspired similar frameworks in regions such as the United States, or in Africa: it demonstrates the EU’s global regulatory leadership.

Collaboration between stakeholders is crucial for a thriving payments landscape. What specific roles do regulation, technology, and consumer behavior play?

All these stakeholders share a common goal, with specific roles to take on. This trend is observed at the pan European level, as well as in each country. Before the PSD (Payment Services Directive), strategies were primarily driven by the supply side (the banks). Today, the demand side – with new entrants such as Fintech companies, but also retailers, corporate treasurers, etc. – plays a vital role by co-creating these strategies. In France, for instance, the National Payments Committee (CNMP, standing for Comité national des moyens de paiement) is co-chaired by the French Banking Federation (FBF, Fédération Bancaire Française) and the French Association of Corporate Treasurers (AFTE, Association Française des Trésoriers d’Entreprise), exemplifying this collaborative model.

Consumers are also becoming more interested and engaged in these topics. Additional stakeholders are also taking part in this discussion, such as telecommunications companies and connectivity and internet providers, broadening the dialogue.

However, according to me, more should be done to involve consumers directly, for instance through consumer associations, notably by educating the public about payment innovations in order to reinforce their knowledge and raise their awareness around new payment methods. It is the informed consumers who actually drive adoption: they are the cornerstone of such solutions and will determine whether or not they will succeed.

Finally, it has become increasingly important to consider the societal and geopolitical contexts – from potential economic crises decreasing real income, which, for instance, led to the rise of Buy Now, Pay Later (BNPL) solutions – as well as the financial inclusion and accessibility aspects.

Europe still relies heavily on non-European payment players (card schemes, Big Tech, etc.). What does “sovereignty” in payments realistically mean for the EU, and why does it matter?

Contrary to what one might think, European sovereignty is not a new topic. It was already debated several years ago during the SEPA migration, when discussions around creating a European card scheme emerged – though the project never materialized.

Today, the issue has become more urgent due to geopolitical tensions, societal changes and economic dependencies. The reality is that we, in Europe, are too dependent on non-European schemes, exposing us to risks and external pressures.

Moreover, as highlighted in the Observatory for the Security of Payment Means report, the payments market continues to grow and therefore drives economic activity and revenue. However, using international schemes means that part of the revenue generated from/in Europe does not benefit Europeans (companies and by extension individuals). Redirecting part of this value to European players would strengthen the region’s economic independence.

There is also a need for Europe to demonstrate its capacity to innovate, especially in areas such as AI and Central Bank Digital Currencies (CBDCs). Other regions – Asia, the US, Brazil, for instance – are moving fast, and Europe must assert its position as an innovative player on the international scene.

Encouragingly, there is now genuine momentum across the ecosystem — beyond politics alone. This makes me think that building EU sovereignty in terms of payments is not only possible but also feasible. All actors, from banks and retailers to treasurers, are involved: several projects have been developed lately, in both the private and public sectors. Initiatives such as the Digital Euro (on which the European Central Bank is working) and EPI Company’s Wero wallet (which already counts over 44 million users, with more features destined to e-commerce and retails soon available) illustrate this progress.
Moreover,  EPI Company recently announced the start of a collaboration with  EuroPA – another payments solution, launched by Bancomat in Italy, Bizum in Spain, MB WAY (SIBS) in Portugal, with new members such as Vipps MobilePay (Nordics) and Blik (Poland). These projects, even if linked to specific countries, have the ambition to create a robust pan European means of payment.

With all these elements and ingredients in place, Europe’s payment autonomy is gradually becoming a reality.

What’s still missing for the EU to build a stronger, more sovereign payments ecosystem?

The overall vision must be further harmonized at the European level. Multiple initiatives are emerging from both the public and private sectors, but greater alignment and clarity would accelerate progress and simplify adoption — especially for merchants wondering which solution to choose. To me, more harmonization as well as more clarifications would therefore enable the efficient development of such an EU sovereign payments ecosystem.

Equally important is communication to and with consumers. Today, payment innovations are often explained in highly technical terms, making them difficult for end-users to grasp. The result is that there is some urgency in the necessity to educate consumers about these changes, why they are coming, and how it will impact them. And also, explain them why creating an EU sovereign payments ecosystem matters.

Finally, the reinforced collaboration between the public and private sectors remains key. The regulator’s support for initiatives like EPI Company’s Wero and the future development of the Digital Euro shows the importance of co-construction.

Who is Andrea Toucinho?

Andrea Toucinho has extensive experience in payments and innovation. She was introduced to the topic back in 2008 when working as a journalist for Point Banque, a French media outlet specializing in finance, where she eventually became Editor-in-Chief.

Driven by her passion for payments and innovation, she transitioned to consulting, joining AND’co in Paris and later Partelya Consulting in 2019 as Director of Studies, Prospective and Training.

In her current role, Andrea produces expert editorial content and research on payments, innovation, and consumer trends. She regularly publishes opinion pieces, including her annual White Paper – this year focusing on Buy Now, Pay Later (BNPL) – and organizes conferences and training sessions to foster knowledge sharing.

She is also Country Ambassador for France at the European Women Payments Network (EWPN), which promotes diversity and inclusion in the payments and finance sectors.