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EU and Cross-border payments

EU and Cross-border payments

Context

Building an efficient and integrated market for payment services has been a longstanding goal of the European Union (EU) as well as globally. The aim is to enable citizens and businesses to conduct effortlessly and securely, cost effective domestic and cross-border payments.

In today’s rapidly evolving landscape, new market developments demand our attention. The ever-increasing digitalization of commerce, driven by the internet, mobile phones, and distributed ledger technology, is reshaping payment ecosystems. Additionally, we witness the emergence of new players, including payment service providers, BigTechs, and digital currency providers, alongside traditional banks, and international card schemes.

Ensuring the reliability and effectiveness of financial infrastructures, crucial components of the domestic, regional, and global financial web, is of paramount importance also to maintain financial stability.

Moreover, the EU’s payments strategy now places emphasis on securing a sufficient level of autonomy to safeguard transaction continuity and cost efficiency. Central Banks in this respect are also accelerating Central Bank Digital Currency (CBDC) projects to maintain accessibility and usability of central bank money in digital environments. Furthermore, CBDCs serve to support monetary sovereignty while mitigating risks associated with external digital assets, aligning with the strategic autonomy objectives of the EU.

To achieve the vision of improved and more integrated EU payment services, common rules and consumer protection arrangements must be established across the EU. Achieving harmonised and balanced economic and financial rules for the diverse partners involved in the payment value chain, is equally critical, as is ensuring a level playing field for all market participants. In parallel reflecting on the appropriate infrastructures becomes essential amid significant changes in the payment environment.

Recent developments, such as the revised Payment Services Directive (PSD2), ISO 20022 adoption, SWIFT Global Payment Initiative, TIPs or EPI initiatives, forthcoming regulation on the digital euro, and customer authentication enhancements, necessitate all careful consideration.

In parallel, a steep improvement of cross border payments in the global context requires multipronged efforts the FSB and CPMI are conducting following related roadmap.

Simultaneously, EU’s commitment to improve its Anti-Money Laundering (AML) approach will remain unwavering. Recent money-laundering scandals across the Union have highlighted the need to address structural deficiencies.

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Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)

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