Will there be a European payment scheme one day?
Money20/20 has just started. Every participant is happy to be back to the event, which is, as usual, a great place to meet and to listen to everyone who counts in the payment industry. This morning, Martina Weimert, CEO of EPI (European Payments Initiative) Interim Company was on stage to answer the question: "Will there ever be pan-European rules and rails to pay?"
Unsurprisingly, the answer is not a strong and resounding "Yes." After lots of hopes have been put in EPI and these hopes have been deceived, the project is now repositioning itself as a plan to set up a European Wallet that will cover the diversity of European markets on both the consumer and merchant side. Payment in Europe is complex as any new project has to integrate the existing systems while taking into account the diversity between countries in size, payment habits, currencies, etc. EPI project will have to integrate not only existing payment systems but also upcoming ones such as the Digital Euro (a CBDC – Central Bank Digital Currency – under control of the European Central Bank) as well as upcoming projects such as the European Digital Identity Wallet.
While there is a consensus on the complexity of European projects, Martina Weimert reaffirmed that one of the issues is the multiplicity of decision makers. Even if EPI members include 31 European banks/credit institutions and two third-party acquirers, the structure was and is still under the crossfire of the European Commission and the European Central Bank. Martina Weimert was happy to get encouraging messages from institutions, but asks them to put their money where their mouth is. As building a European payment system should not be done with American or Chinese financing, it has to rely on European funding sources, and keep a balance between public and private funding. Payment is an essential part of European sovereignty: we've just seen that Visa and MasterCard were able to cut off a country from their systems in a couple days. Martina Weimert asks why there is funding from the European authorities for batteries but not for payments!
In many cases, the motto "Think big, Start small, Build quickly" is a safe path for project development. During the session, it was made clear that this method is not adapted to the payment ecosystem: as solutions are already in place, no one is asking for an extra option to perform basic payment. Any new proposal has to bring a significant integration and added value compared to existing ones.
After this session, and for anyone who has followed the industry news for a while, there is no doubt we will not have cards with a European logo replacing our Visa or Mastercard cards any time soon.