New trends in retail payments: How technological changes are reshaping the payments system. Introducing a proposal for a new pan-European instant payment system

Abstract

Since the institution of a unified European market, the retail payment system has changed significantly. In September 2020, the European Commission adopted the Digital Finance Package, that includes a digital finance strategy, legislative proposals on crypto-assets and digital resilience, as well as a renewed strategy for retail payments.

This work proposes the framework for a new pan-European retail payment system based on public identity recognition and disintermediation of currently used devices: Euro-PaID. The aim is to have a competitive EU financial sector that gives consumers access to innovative financial products whilst ensuring consumer protection and financial stability.

The new system is designed in compliance with existing regulations. However, because certain aspects do not fall within the scope of applicable EU law, ad hoc regulation should be enacted. We concluded that a holistic approach is essential in rethinking regulation to address the numerous social implications of a hypothetical change in the payments system.