Why eIDAS Will Fail in Banking

Posted on December 27, 2025 by InsidePmts

Real World Examples

Two weeks ago I penned eIDAS – EU’s Digital Siege. If you didn’t read it, the summary is that EU’s scheme is another attempt to end run BigTech and Visa/Mastercard with a set of “keys” in a digital wallet that are separate from any bank, platform or handset. While technically brilliant, trust requires either a legal mandate, or a commercial construct (and I explain why in the blog).

Today I’m going to provide a few layman’s examples of why eIDAS will not work in Financial Services (beyond acting as a signal). What is the problem the EU is working to solve? Unfortunately there is not single answer here, just like PSD2/PSD2/SEPA.. “Build it and they will come” (see blog on the EU’s Nobel Prize winner behind IFR – Jean Triole). If the core problem were “How do we prove something cryptographically across borders?”, eIDAS would already be a success.

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2025: The Great Decoupling

Posted on December 23, 2025 by InsidePmts

Year-End Payments Recap

Summary: B2B Stablecoin and The End of the Interface Era

As we close the books on 2025, the payments industry finds itself at a moment that future historians will likely designate as the end of the “Interface Era” and the dawn of the “Agentic Era.” For the past three decades, the digitization of payments has been defined by the migration of human intent from POS to digital screens. From the first e-commerce transaction to the ubiquity of mobile wallets, the fundamental atomic unit of the economy remained the same: a human being, interacting with a graphical user interface (GUI), making a conscious decision to exchange value for goods or services.

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Europe’s Siege – Digital Sovereignty Strategy

Posted on December 18, 2025 by InsidePmts

Summary

EU’s payment and identity landscape is currently the theater of a high-stakes conflict between regulatory ambition and commercial reality. For the past decade, European legislators have pursued a strategy of “regulatory innovation,” attempting to break the dominance of US-based technology platforms (Apple, Google) and payment networks (Visa, Mastercard) through legislative mandates. From the failed efforts of 2015 IFR (regulating excess profits), PSD2, PSD3 and eIDAS 2.0, the pattern is consistent: enforce technical openness in the hope that competitive markets will spontaneously emerge.

This strategy is fundamentally flawed because it conflates technical connectivity with commercial viability. While the EU has successfully legislated open APIs and is now forcing open the phone SE architecture, it has consistently failed to address the “commercial constructs” (governance, liability, and economic incentives) that make these systems work. Without a radical shift acknowledging the necessity of commercial constructs over regulation, the EU’s initiatives will result in compliant but commercially irrelevant infrastructure, that no one will monetize (or invest in), further relegating the EU to a second tier market and leaving US platforms to dominate.

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Part 1 – Identity Models, Government and Governance Structures

Posted on February 3, 2024 by InsidePmts

This is a big topic, and I’ll get a few things wrong. My mechanism for correcting my viewpoint is this blog, where this community gives feedback. It’s the reason I write. I won’t get into the tech weeds in this blog series. When there is a need to drill down on a standard or tech, I’ll provide a link to documents providing an overview. The insight I’m attempting to provide surrounds the evolution, economics and value chain implications of various models.

Why read this?

Identity is the key shaping force across many domains (including payments) because:

ID touches “everything”,

ID is the “primary key” in trust, risk, contracts and value exchange

ID is core to a well-functioning government (voting, taxing, regulating, …etc).

This breadth makes it challenging to sift through ID-related announcements and assess the implications. Thus, I’ve created three identity communities for my taxonomy:

Government – Working to define identity as part of Digital Public Infrastructure (DPI). DPI has three legs: identity, payments and data exchange.

Commercial – Platforms, Banks, Healthcare

Web3/Blockchain/Social – Jack Dorsey is the unofficial spokesperson.

These communities find alignment in technology but are working toward different end goals with significant philosophical differences across communities, particularly regarding the role of government and near-term objectives. These differences surround the definition of trust, authority and governance structure, which is the focus of today’s blog.