An efficient market for payment services in Europe should guarantee:

  • the same rules all over the EU
  • clear information on payments
  • fast payments
  • consumer protection
  • a wide choice of payment services

The EU is aiming to create a single payment area

  • which lets citizens and businesses make cross-border payments as easily and safely as they would in their own countries
  • where cross-border payments are subject to the same charges as domestic payments

Retail payments strategy

On 24 September 2020, the Commission adopted a retail payments strategy for the EU that aims to further develop the European payments market so Europe can fully reap the benefits of innovation and opportunities that come with digitalisation. The strategy focuses on creating the conditions that make it possible to develop instant payments and EU-wide payment solutions that are cost effective and accessible to individuals and businesses across Europe. At the same time, consumer protection is at the heart of the Commission’s strategy in order to create safe payment solutions where risks are monitored and mitigated effectively. By developing EU-wide payment solutions, the Commission also wishes to lessen Europe’s dependency on big global players.

EU rules on payment services

The EU set up common rules for payments with the adoption of the first payment services directive (PSD 1) in 2007.

The payment services directive established the same set of rules on payments across the whole European Economic Area (European Union, Iceland, Norway and Liechtenstein), covering all types of electronic and non-cash payments, such as

  • credit transfers
  • direct debits
  • card payments
  • mobile and online payments

The directive laid down rules about the information that payment services providers have to give to consumers and about the rights and obligations linked to the use of payment services.

The directive introduced a new category of payment service providers other than banks – the so-called 'payment services'. This has increased competition and choice for consumers.

The directive also laid the groundwork for the single euro payments area, which allows consumers and businesses to make payments under the same conditions across the euro area.

Revision of EU legislation

In 2015 the EU adopted a new directive on payment services (PSD 2) to improve the existing rules and take new digital payment services into account. The directive became applicable in January 2018. It includes provisions to

  • make it easier and safer to use internet payment services
  • better protect consumers against fraud, abuse, and payment problems
  • promote innovative mobile and internet payment services
  • strengthen consumer rights
  • strengthen the role of the European Banking Authority (EBA) to coordinate supervisory authorities and draft technical standards

The directive is part of a legislative package that also includes a regulation on multilateral interchange fees. Together, the regulation and the second payment services directive,

  • limit the fees for transactions based on consumer debit and credit cards
  • ban retailers from imposing surcharges on customers for the use of these types of cards

Digital euro

The digital euro, a digital form of central bank money, would offer greater choice to consumers and businesses in situations where physical cash cannot be used. However, the digital euro would be a complement to cash, which should remain widely available and useable.

The European Central Bank (ECB) and the European Commission services are jointly reviewing at technical level a broad range of policy, legal and technical questions emerging from a possible introduction of a digital euro, taking into account their respective mandates and independence provided for in the Treaties.

In January 2021, the Commission and ECB agreed to work together to analyse various design options and the related regulatory implications of the digital euro.

On 14 July 2021, the ECB decided to launch the investigation phase of the digital euro project. The investigation phase consists of looking at the various design options, user requirements and at how financial intermediaries could provide services based on the digital euro. During this phase, the Commission will continue to closely cooperate with the ECB on analysing and testing the various design options in view of policy objectives.

In the context of the EU’s digital transition, the digital euro could support the EU’s digital finance and retail payments strategies described above, given its potential as an additional, innovative and safe means of payment.

The digital euro could also increase the international role of the euro and support the EU’s open strategic autonomy (see the Commission Communication of 19 January 2021).

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