The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

This blog is a collaboration between Robert-Jan Wekking and Alan Verschoyle-King from the Projective Group, and Carlos Nasher, Thede Consulting, part of Projective Group.

In October 2025, the ECB approved the next phase of the digital euro project. Assuming EU lawmakers give it the green-light next year the digital euro could roll out as early as 2029. The ECB positions the digital euro as legal tender. Therefore, merchants may be required to accept it, something that is being debated as we write.

Wero is another digital payment system and a private sector initiative. Behind it stands the European Payments Initiative (EPI), which includes 14 banks and 2 payment service providers from across Europe. Wero is not legal tender, so merchants are under no obligation to accept it. However, it does have one major advantage over the digital euro: it already exists and is available to consumers.

Embedded finance at its core means making payments, banking, and insurance, “invisible”.  The corresponding functions are instead seamlessly integrated into the products and platforms of non-financial service providers. For example, a retailer directly offers a loan for the purchase of their products, or car insurance is bought at the car dealership.

At the same time, there is an incoming wave of regulations that will further impact the payment sector. Collectively, PSD3 (Payment Services and Electronic Money Services Directive), PSR (Payment Services Regulation), DORA (Digital Operations Resilience Act), and the potential FiDA (Financial Data Access) framework, as well as the rollout of the E.U. Digital Identity Wallet (EUDIW), will fundamentally reshape how the market operates. 

Whilst compliance does pose challenges, the combination of the greater availability of data added to the benefits of Artificial Intelligence offers huge opportunities to create more tailored customer experiences. AI can analyse transaction data in real time, detect suspicious patterns, and prevent fraud.

The payments industry is heading into uncertain territory. Banks will need to future-proof their current offerings and potentially develop new ones.  Payment service providers will need to adapt their business models to be able to generate revenue, regardless of whether the digital euro prevails, EPI/Wero gain traction, or things remain as they are. Merchants will need to take a close look at their payment strategy to ensure it is flexible enough to potentially accommodate EPI/Wero and the digital euro. 

The winners? The banks, payment service providers, and retailers who remain agile and able to strategically reposition themselves in response to market changes. 

At Projective Group, we thrive on leading change in the financial sector. Our dedicated Payments Practice has more than 100 financial experts who understand the dynamics of the payments sector and embrace the latest technologies. Established twenty years ago, we have evolved to become a trusted partner for companies that want to thrive and prosper in an ever-changing financial services landscape.