How to ensure a safer future for retail payments: Aligning fraud prevention and accountability in the EU

Retail payment fraud is a structural challenge that no longer falls solely within the remit of payment service providers (PSPs). As transactions flow through increasingly fragmented digital ecosystems, the mismatch between where fraud occurs and where liability falls is becoming unsustainable.

This ECRI Policy Brief examines how modern fraud exploits institutional asymmetries and identifies why a realignment of preventive duties and financial responsibility is needed. Drawing on international experiences – from Singapore’s cascading liability model to the UK’s reimbursement regime – it argues that effective fraud prevention requires proportional accountability across the full value chain. It then turns to the evolving European regulatory framework, highlighting its ambition but also its structural and legal constraints.

Finally, three policy recommendations are provided, specifically to foster meaningful cross-sectoral cooperation, to clarify data-sharing rules and to institutionalise shared accountability mechanisms.

The key message is that fraud prevention and accountability aren’t separate goals and shouldn’t be treated as such – instead, they’re really two sides of the same coin.

Judith Arnal is Senior Research Fellow at ECRI and CEPS.