The Single Euro Payments Area (SEPA) is probably the most ambitious self-regulatory project aimed
at creating a single integrated European digital payments market since the introduction of the Euro.
SEPA aims to make EU more innovative and competitive. When considering the SEPA initiative and
combining it with the disruptive and innovative nature the mobile phone permeates, the result is a
market that is rapidly transforming from well-established into a state of flux. We build a model to
understand and explain this transformation of the digital payment infrastructure. The model captures
the formation and development of digital payment infrastructure with a particular emphasis on the
regulator´s perspective. It consists of four stages characterized by slow incremental change following
by short rapid bursts of discontinuity. Each stage is portrayed by its evolutionary dynamics, the
nature of the payment platform, the legal implications, the regulatory asymmetry, the level of
competition, and what drives the discontinuity.
