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  • Thierry Spanjaard

EPI: the mountain has brought forth a mouse

EPI, European Payment Initiative, the heir of PEPSI (Pan European Payment System Initiative), which had been launched a couple years ago, had as its objectives to become a European Payment Scheme, on par with the giants of this world, obviously Visa and MasterCard but also China UnionPay, Mir and a couple others. EPI also targets the risk of seeing payments, which appear as a sovereignty attribute, being taken over by the GAFAM (Google, Amazon, Facebook, Apple, Microsoft) or the BATX (Baidu, Alibaba, Tencent, Xiaomi). “The primary goal of EPI is to standardize payments in Europe and make them more efficient and therefore cheaper,” said Eric Tak, Global Head ING Payments Center and member of the EPI steering committee.

Last month, EPI, which has been dubbed “the Airbus of payments” by journalists, was expected to announce a roadmap towards a formal launch of payment instruments within a foreseeable period. However, the only decision that was made in the November 29, 2021, board meeting was to transform “EPI interim company” into “EPI target company.” The mountain has brought forth a mouse to the great disappointment of all those who believe in a European payment future.

Martina Weimert, CEO of EPI, confirmed that EPI is now seeking public funding to support its development. She told Reuters that retailers are not willing to fund the new initiative, and that banks and other EPI shareholders “can carry only so much.” According to NFCW, original shareholders already invested EUR 30 million in the initiative but “several billions of euros will be needed.” L'Agefi says that the target company will have EUR 1.3 to 1.5 billion in equity, but Martina Weimert did not confirm this figure.

EPI appears more mature and with more support than previous European projects. It had been launched in November 2019 by the European Commission with support of the ECB, the European Central Bank, and private financial institutions. EPI sets up as one of its goals to replace the “existing patchwork of domestic payment systems.” When the project was announced in 2020, EPI expected the first EPI transactions to take place in Q1/2022.

The EPI projects envisions two products: a physical card and a digital wallet, with which digital card transactions can be made as well as end-to-end instant payments. The goal is for EPI to be present in all types of transactions: at physical, online and mobile merchants, at ATMS and P2P transactions, as the underlying layer may be instant payments infrastructure, which is already standardized and deployed across Europe.

At its launch, the EPI projects was supported by financial institutions from Germany, France, Spain, the Netherlands and Belgium: BBVA, BPCE, BNPParibas, CaixaBank, Commerzbank, Credit Agricole, Credit Mutuel, Deutsche bank, Deutscher Sparkassen- und Giroverband, DZ bank, ING, KBC, La banque postale, Banco Santander, Societe Generale and UniCredit. They were later joined by Worldline, Nets Group, OP Financial Group, PKO Bank Polski and the Spanish Banking Consortium, which includes 12 Spanish financial institutions.

Other parts of the puzzle are also getting in place as the ECB Governing Council just approved a new oversight framework for electronic payments called the PISA (Payment Instruments, Schemes and Arrangements) framework that covers electronic payment instruments, such as direct debits or credit transfers, schemes for electronic payment instruments, such as digital payment token schemes or e-money schemes and arrangements for electronic payment instruments, such as electronic wallets.

So will the EPI mouse be able to grow and get on par with the dove or the overlapping circles or will it join past initiatives such as Europay International, Visa Europe, Monnet Project, EAPS (Euro Alliance of Payment Schemes), PayFair, in the cemetery of European payment projects?

Photo credits: Photo by Tabrez Syed - by Ricky Kharawala - by Mathieu Stern - by Vincent Giersch, all on Unsplash

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