European Union advances digital identity and payment integration

The European Payments Council has introduced the SCARLET initiative, a framework designed to standardize how payment service providers accept European digital identity wallets for payment authentication. Approved for development in September 2026, the initiative aims to unify technical and business procedures between banks, wallet providers, and European institutions to enhance transaction speed and security.

In parallel, Europe is working on two major projects to transform the payment landscape: the digital euro and the European Payments Network (EPN). The EPN, established in Madrid, connects existing mobile payment solutions across 13 countries, including Spain’s Bizum, Italy’s Bancomat, and Norway’s Vipps MobilePay. This infrastructure covers approximately 70 percent of the EU and Norwegian populations, serving around 130 million active users.

While the EPN facilitates interoperability between national mobile systems, the digital euro is being developed by the European Central Bank as an electronic form of public money. It is intended to complement existing electronic payments and cash rather than replace them, offering a direct digital issuance of the euro for use in person, online, and potentially offline.