Over the last month, I was fortunate to interview EU banks and non-card payment schemes. The people are just fantastic, and I came away with a new appreciation of the challenges of working in a payments environment with so much “central planning”. The questions I asked myself: How best to achieve the objective of being a “digital first” economy? Centrally planned mandates? or markets with commercial incentives? When there is no margin in payments who can invest in the infrastructure (or governance)?

Europe’s payment ecosystem is shaped by the “central planning” of the ECB and the European Commission: SEPA, PSD2, PSD3 and the Payment Services Regulation (PSR), eIDAS, the Instant Payments Regulation, the digital euro and the EU Digital Identity (EUDI) wallet. I have written about this before, in Payments Innovation in Europe (2011), Building Networks and “Openness” (2011), Open Banking, Open Payments and Trust Networks (2020) and Europe’s Siege (2025). Today’s blog is focused on my new insight: how much of the cost lands on the banks, and how little room that leaves for anything else.

Thought for the day: Mandates build rails. Markets build businesses.