Eurozone banks’ payments platform takes aim at global card firms and Big Tech rivals
A group of 16 major European banks from five countries (Belgium, France, Germany, the Netherlands and Spain) have paved the way for the future launch of the European Payments Initiative (EPI). The ambition of EPI is to create a unified pan-European payment solution leveraging instant payments – particularly the SEPA Instant Credit Transfer (SCT Inst) – offering a card for merchants and customers across Europe, a digital wallet and P2P payments.
The initiative is intended to address current shortcomings in cross-border European payments. Despite attempts at payments harmonisation in the Eurozone through developments such as the single euro payments area (SEPA), ten European countries still have national card schemes that do not accept cards from other EU Member States. There is also a growing number of innovative services, such as mobile wallets, that are only offered at the national level.
These limitations have hampered the ability to have a consistent B2B payments experience across the continent. The current situation has attracted initiatives from the global card companies and Big Tech firms that aim to overcome the shortcomings of cross-border retail payments by building a new separate payments ecosystem.
A statement from the banks involved says that the EPI’s objective is to offer a digital payment solution that can be used anywhere in Europe and to supersede the fragmented landscape that currently exists. The solution also aims to offer European merchants a seamless, competitive and unified payment solution for the whole of Europe that is also available to all Europeans.
In addition, the creation of EPI is designed to support the implementation of the political agenda for both European public institutions and national authorities, in particular through the creation of a truly European solution in the fields of payments, banking and technology. The statement from the founder banks says that existing digital payment solutions are fragmented in Europe and the Covid-19 crisis has underlined the need for a unified European digital payment solution. In this sense, EPI also aims to align the European payments ecosystem of banks, merchants, acquirers and payment services providers, thereby contributing to strengthening of the European single market and digital agenda.
The EPI’s implementation phase is expected to materialise in coming weeks through the creation of an interim company in Brussels, Belgium. This will set out deliverables including the completion of the technical and operational roadmap and initiating the implementation work to achieve a best-in-class user experience. The performance of the interim company will be evaluated by each bank before moving on to the EPI’s final corporate structure.
Other payment service providers have also been invited to join the initiative. European market players, individual banks or banking syndicates, as well as third-party payment service providers can apply and join EPI as a founder until the end of 2020. EPI is expected to enter the operational stage in 2022.
The EPI initiative has been welcomed by the European Central Bank (ECB).
“The European Payments Initiative will have to tackle the fragmentation in European retail payments and should encompass all euro area countries, and eventually the entire European Union”, said ECB Executive Board member Fabio Panetta. “The foreseen effective implementation and a growing number of participants have the potential to strengthen the role of European providers.”
The EPI founding members to date are BBVA, BNP Paribas, Groupe BPCE, CaixaBank, Commerzbank, Crédit Agricole, Crédit Mutuel, Deutsche Bank, Deutscher Sparkassen- und Giroverband, DZ Bank, ING, KBC Group, La Banque Postale, Banco Santander, Societe Generale, and UniCredit.