Europe’s banking and payments leaders have renewed calls for a stronger balance between innovation and strategic sovereignty as the region seeks to remain competitive in an increasingly digital global payments market. Speaking during a high-level roundtable at EBAday 2026, industry executives warned that while Europe possesses robust payment infrastructure, regulatory pressures, fragmented investment and slow adoption of innovative services risk undermining its ability to compete with fast-moving international rivals.
Why Is Payments Sovereignty Becoming A Strategic Priority For Europe?
The debate over payments sovereignty has intensified as policymakers and financial institutions increasingly view payment systems as critical economic infrastructure. During the EBAday 2026 strategic roundtable, moderator Olivier Denecker described payments as a strategic asset comparable to energy, defence and transportation, arguing that modern economies cannot function without efficient and secure payment networks.
The discussion comes amid broader European efforts to reduce dependence on non-European payment providers and strengthen the region’s financial autonomy. As geopolitical uncertainties and technological competition continue to reshape global markets, many policymakers see domestic payment capabilities as essential to economic resilience.
However, participants stressed that sovereignty alone cannot be the end goal. Instead, they argued that innovation must remain central to Europe’s long-term strategy if it is to maintain relevance in the rapidly evolving digital payments sector.
What Challenges Are Holding Back European Payments Innovation?
According to speakers at the event, Europe’s difficulties stem less from technology and more from structural barriers.
Denecker challenged the perception that Europe lacks innovation, highlighting that several globally significant payment technologies, including chip-and-pin systems, originated in Europe. Yet he argued that European innovations often struggle to scale successfully across the continent.
One major obstacle remains fragmented investment. Unlike larger and more unified markets, Europe’s financial ecosystem consists of multiple jurisdictions, regulatory frameworks and funding environments. This fragmentation can make it difficult for innovative payment firms and banking technology providers to expand efficiently.
Industry leaders also pointed to increasing regulatory obligations. Banks are dedicating substantial resources to compliance requirements, leaving fewer funds available for research, development and customer-focused innovation.
Concerns were additionally raised about overlapping public and private sector initiatives. Some participants warned that competing projects risk diverting attention and investment away from developing new payment services and technologies.
How Strong Is Europe’s Existing Payments Infrastructure?
Despite concerns about innovation, speakers broadly agreed that Europe already possesses highly reliable payment infrastructure.
Carlo Bovero, Global Head of Cards and Retail Payments at BNP Paribas, noted that Europe has successfully established large-scale instant payment platforms capable of supporting millions of transactions. He argued that the infrastructure itself is no longer the primary challenge.
Instead, attention is shifting towards creating services and applications that make these systems more useful for consumers and businesses. Industry experts increasingly believe that successful payment systems depend not only on speed and security but also on convenience and practical everyday use cases.
This distinction highlights a growing consensus within the banking sector that infrastructure investment alone will not guarantee widespread adoption.
Why Are India’s UPI And Brazil’s Pix Frequently Mentioned?
Comparisons with international payment systems featured prominently throughout the discussion.
Mark McNulty, Head of UK and Europe Payments and Operations Transformation at Citi, argued that Europe performs strongly in wholesale and cross-border payments. He described the region’s ecosystem as resilient, globally interoperable and capable of supporting sophisticated financial markets.
However, he suggested that Europe continues to lag behind systems such as India’s UPI and Brazil’s Pix in retail payments adoption.
These platforms have gained international attention because they successfully transformed payment infrastructure into everyday consumer services. Their widespread usage has been driven by seamless integration, convenience and effective collaboration between regulators, financial institutions and technology providers.
For many observers, these examples demonstrate that technical capability alone is insufficient without strong user engagement and practical functionality.
What Did Industry Polls Reveal About Banking Priorities?
Audience polling conducted during the session provided insight into where banking professionals believe future investment should be directed.
When asked which areas should receive the greatest focus over the next three years, 59% selected account-to-account and instant payments. Fraud and financial crime prevention followed at 41%.
Meanwhile, only 9% prioritised independent European payment solutions, while artificial intelligence-powered services, open finance, embedded payments and digital identity each received approximately 5%.
The results suggest that industry participants are placing greater emphasis on enhancing customer experiences and improving security rather than pursuing sovereignty-focused projects alone.
Panellists argued that addressing fraud risks and expanding real-time payment capabilities are likely to deliver more immediate benefits for consumers and businesses.
Does Europe Need One Unified Payment System?
A key question during the discussion centred on whether Europe should pursue a single payment scheme or encourage multiple interoperable solutions.
Bovero pointed to initiatives such as the European Payments Initiative’s Wero platform as examples of efforts focused on interoperability rather than complete uniformity. He suggested that scale and collaboration are more important than creating a single mandated system.
McNulty echoed this view, arguing that user convenience will ultimately determine adoption rates. Industry participants generally agreed that harmonised technical standards and seamless interoperability represent a more achievable and effective approach than forcing consolidation into one platform.
The discussion also highlighted the importance of continued investment in fraud prevention tools, including Verification of Payee (VoP) technologies designed to reduce payment scams.
Why Is The Digital Euro Generating Debate?
The proposed digital euro emerged as one of the most contested topics during the session.
Bovero estimated that preparing for a digital euro could consume between 40% and 50% of some banks’ operational capacity over the next three to four years. He questioned whether current consumer demand justifies such a significant commitment of resources.
Critics within the industry fear that a digital euro could compete with private-sector payment innovations rather than complement them. Supporters, however, argue that it could strengthen European monetary sovereignty and provide a secure digital payment option backed by central bank infrastructure.
The debate reflects broader tensions between regulatory ambitions and market-driven innovation across Europe’s financial sector.
What Could The Future Of European Payments Look Like?
Looking ahead, panellists identified several technologies that could shape the next phase of payments innovation.
Bovero highlighted agentic commerce—where artificial intelligence systems make purchasing decisions and execute transactions on behalf of users—as an emerging trend Europe must monitor closely.
McNulty pointed to tokenisation, digital assets and enhanced interoperability as areas where Europe could establish global leadership if investment and regulatory frameworks are aligned effectively.
The discussion concluded with a shared recognition that innovation and sovereignty should not be viewed as competing objectives. Rather, industry leaders argued that Europe’s long-term competitiveness will depend on achieving both simultaneously.
As digital payments continue to evolve, the choices made by banks, regulators and technology providers over the coming years will shape the future of European finance. Whether through instant payments, digital identity solutions, artificial intelligence or the digital euro, the challenge will be ensuring that Europe remains both technologically innovative and strategically independent. For businesses, consumers and policymakers alike, the outcome of this debate will have far-reaching implications, making it a development worth watching closely in the years ahead.
