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As Europe advances its digital transition, payment systems are becoming an increasingly important pillar of the EU’s financial services framework with the goal of securing European autonomy. In this context, EU initiatives in retail payments are shaping the future of financial transactions between citizens, businesses and public authorities.

These legislative files have increasingly shown that payment services are a critical component of welfare delivery. A clear and simple payments framework is also key to ensuring the welfare sector functions. As such, the Welfare Sector Payments (WSPs) encompasses not only the transfer of benefits to citizens, but also tax payments, social security contributions, and financial transactions between the various public and private actors involved. Effective payment systems can help ensure that funds are transferred securely, accurately and on time, supporting both beneficiaries and administrators throughout the welfare value chain.

Despite progress in modernising payments, welfare-sector payment systems in many Member States remain fragmented, creating administrative burdens and barriers for both providers and users. Greater integration could help simplify processes, improve accessibility, and strengthen coordination across the welfare ecosystem. Achieving this will require collaboration between public authorities, financial institutions, technology providers and beneficiaries, supported by appropriate policy frameworks and digital infrastructure investments.

The EU's evolving regulatory framework, including the proposed Payment Services Regulation (PSR) and Third Payment Services Directive (PSD3), the Digital Euro Regulation, the Instant Payments Regulation (IPR), the European digital identity wallet (EUDI), the Supplementary Pensions Package and the Savings and Investment Accounts Recommendation, aims to improve consumer protection, transparency, and competition in payments. These initiatives, together with broader digital policies and discussions around the digital euro, may offer new opportunities to support more connected, inclusive and resilient welfare payment systems.

Join this Euractiv In-Person Policy Debate to discuss how integrated digital payment systems can improve the accessibility, efficiency and connectivity of welfare delivery across Europe.

Questions to be addressed include:
- What are the main challenges preventing greater integration of welfare sector payment systems?
- How can governments, payment providers and other stakeholders improve coordination across the welfare value chain?
- What policy measures are needed to ensure that the digital transformation of welfare payments remains inclusive for citizens with limited access to banking or digital services?
- What lessons/best practices can be drawn from Member States that have successfully streamlined welfare payment processes through digitalisation and integration?
- In what ways can a digital euro strengthen European strategic autonomy in welfare payment delivery compared to reliance on non-EU payment rails or private providers?
- What investments are necessary to enhance both the public sector’s and commercial banking’s digital infrastructure to modernise legacy welfare payment systems?

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