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The past few years have witnessed a profound evolution in the SEPA payments sector, marked by technological innovations and regulatory interventions. The rise of contactless transactions, the advent of real-time payments, and the implementation of open banking have collectively shaped a dynamic and efficient payments ecosystem. As we look to the future, the SEPA markets are poised to continue embracing advancements in payments systems that enhance the overall experience for both consumers and businesses.


The payments sector in the Single Euro Payments Area (SEPA) has undergone a significant transformation over the last decade and big changes are expected also for the years to come. The driver of those changes is a confluence of technological advancements and the evolution of the regulatory framework, which have not only reshaped the way transactions are performed but have also structured a more efficient, secure, and harmonised payments landscape.


In terms of technological advancements, the unprecedented rise of digital transactions is mainly due to the proliferation of smartphones and the widespread adoption of online shopping. Various digital payment instruments, including mobile wallets, contactless cards, and online banking, have become integral parts of the payment ecosystem.

Looking at it from the consumers’ side, digital payments have become increasingly popular because they allow for seamless and secure transactions. From the business side, the rise of e-commerce and online marketplaces has increased the need for secure and efficient payment systems that can facilitate cross-border transactions.


Another turning point witnessed in the last ten years is the adoption of contactless payments. Contactless payments have gained immense popularity during the COVID-19 pandemic, and now consumers prefer the convenience of tapping their cards or smartphones on a POS for quick and secure transactions. This trend has not only expedited the checkout process but has also contributed to the decline of cash transactions.



According to an ECB study, contactless card payments at the POS increased from 41% of all card payments in 2019 to 62% in 2022.


Regarding the regulatory changes, in addition to legislative updates affecting banking institutions, financial market, and in general the business stakeholders, one of the most notable legislative changes that has resonated with consumers is the adoption of the revised Payments Service Directive (PSD2).

The PSD2 mandates banks to open their application interfaces (APIs) to third-party developers, encouraging the creation of innovative payment solutions and services. While its main goal was to foster competition and innovation, in fact this directive review has led to the emergence of Open Banking, which is now shifting to Open Finance. In practical terms, customers have experienced significant advantages through heightened competition, new tools to monitor their finances, and the implementation of Strong Customer Authentication methods, leading to a notable advancement in security measures.


Another significant step in terms of regulatory framework, is the introduction of SEPA Instant Credit Transfer, allowing for real-time payments across SEPA countries and enhancing the overall efficiency of the payment system. Developments in this respect are underway to foster the adoption of instant payments across Europe.

These transformations underscore the dynamic nature of the payments sector, marked by the emergence of new players and high competitiveness with significant positive consequences for consumers, contributing to the overall advancement of the system.



3H Partners has been actively involved in this sector for over five years, providing ongoing support to the European Payments Stakeholders Group (EPSG – former European Cards Stakeholder Group), an international non-profit association in the payments sector based in Brussels that stands as one of the few entities in the payments industry with a multi-sector perspective and a multi-stakeholder approach. This inclusivity extends to both technological advancements and regulatory aspects, contributing to a comprehensive understanding of the industry landscape.


What are the challenges of the future that we foresee from this privileged point of view?

The implementation of advanced technologies such as blockchain and artificial intelligence are expected to drive market growth in the coming years, in combination with the Digital Decade policy program 2030 launched by the European Union and some of its related flagship projects, such as the European Digital Identity Wallet, and the Digital Euro.

Finally, security is — and will remain — a trending topic. Substantial investments and comprehensive studies are anticipated to be necessary to address the challenges posed by the rapidly evolving payments landscape.




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