In collaboration with The Payments Association EU, this annual report delivers a comprehensive analysis of Europe’s dynamic payments industry—from Benelux to the Baltics. It features the latest regulatory requirements, consumer preferences, and institutional initiatives at play to give payment service providers the perspective needed to clarify business priorities.

Payments have evolved significantly over the past year.

While the payment industry embraces considerable advancements, the European economic and financial sectors continue to improve their strategic autonomy. 

EU payment regulations have gradually improved over the last few years, aligning legal frameworks with market demands for more innovative banking practices; following the European Banking Authority’s Revised Payment Services Directive (PSD2) that entered into force in 2016, the Revised Cross-Border Payment regulation (CBPR2) entered into force in 2021.

2023 and 2024 have been notable for significant, concrete regulatory advancements. This year’s collaborative report with The Payments Association EU details some of the most significant updates and critical changes you will need to make in order to be compliant and meet customer expectations.

Important updates for payment service providers

Payment players will need to meet new requirements following the recent adoption of several legislative texts. The Central Electronic System of Payment Information (CESOP), for example, was created to enable better cross-border data circulation. Since 1 January 2024, CESOP has been requiring payment service providers (PSPs) to transmit information on cross-border payments originating from Member States and on their beneficiaries.

To keep pace with the rapidly evolving payments landscape, new regulations are poised to reinforce the current framework. The proposal for the Payment Services Directive 3 (PSD3) was unveiled in June 2023, and a few months after, in February 2024, the European Commission published the Instant Payments Regulation which will require money transfers to be processed within ten seconds. Unsurprisingly, this will demand significant internal changes from banks and PSPs.

Click here to enlarge the picture

Other evolutions are being considered to complement the existing framework. In its updated retail payments strategy outlining priorities for 2024 and beyond, the European Central Bank renewed its commitment to further strengthen the "classic" SEPA, enhancing the resilience of retail payments and supporting innovation and digitalization.

Discussions about the digital euro have also started. Although its issuance is still in the early stages of development, it demonstrates the desire for a forward-looking payment system that will require a clear roadmap for the coming years.

Three key trends taking shape

Europe’s payment industry is moving fast, while other countries take a slower speed.

1. Payment transactions are increasingly shifting toward cashless methods. Tax avoidance is a significant concern that is often enabled by cash payments. To help reduce this threat, European countries are increasingly leaning toward cashless methods; this significantly increases competition in the industry as EU payment players strive to meet consumer priorities.
2. Contactless culture is gaining traction. Contactless payment transactions are increasing in Europe. In some countries, like Germany, the prominent use of mobile payment marks a real shift from the country's historical preference for cash payments.
3. While consumer payment habits vary across the EU, so do the levels of institutional support. For example, several European countries have adopted a national payment strategy to align with key regulatory requirements, while others have not yet devoted the resources.

These trends and strategies will be covered in more detail in the report.

Structure of the report

In Part 1, Deloitte payments experts address the latest regulatory and market developments in EU payments over the past year. This part includes interviews with Deloitte specialists from Luxembourg and Germany as well as other industry experts.

In Part 2, The Payments Association EU takes a closer look at the dynamics that European payment players must contend with in today’s payments landscape. Featuring a regional perspective, it highlights the various players and details a comprehensive analysis of the EU’s various payment environments, noting each Member State’s domestic payment representatives and unveiling several country-specific findings.

For each country, a Deloitte expert provides a keynote analysis of the situation through a local lens.

It is important to note that most European payment players can fit into multiple categories. For example, payment service providers that enjoy a strong presence in their home country, but also have operations in neighboring countries, are included in both the report’s domestic and regional sections.