The aim of this work is to describe the evolution of the European payment system with special emphasis on the SEPA and TARGET system. The PSD2 Directive and the competitiveness of non-bank financial institutions in the payment transactions segment will also be addressed. In the first part of the paper, he dealt with the area of the urosystem, its main tasks, the execution of the tasks of the Eurosystem, the role of the European Central Bank, the competences of the European Central Bank and its composition. The European Central Bank is important because it manages the euro and implements the economic and monetary policy of the European Union. The second part of the paper deals with the SEPA program, a project that marks a single area for payment in euros. TARGET2 is a real-time gross settlement system operated and owned by the Eurosystem. Work deals with the topic of the initiative of the PSD2 Directive, which it brings to clients, the competition of banks. At the end of the paper, the topic of adjusting the Croatian payment system for entering the euro area was discussed. The question was whether Croatia was ready for such a challenge, what were the benefits and what were the costs of introducing the euro. The main benefits of the work, beside the introduction in the new payment system process, is to compare the functionalities and effects of new payment system with other countries joined to Euro zone.