The European Banks as well as core credit processors within the territory are operating harder for establishment of latest pan-European Payment network for competing as well as in challenging the overall dominance as witnessed by US Payment firms Mastercard, VISA as well as to counter the threat received from technological giants like PayPal, Google as Apple.
There are almost 31 European banks as well as credit institutions who have united to form an alliance for progression of a pan-European payments network. The various European Banks as well as credit institutions includes Deutsche Bank, UniCredit, BNP Paribas, ING, Societe Generale, Santander and Sabadell.
It also has the assistance of the European Commission as well as numerous financial regulators in the bloc. The Brussels-based venture, known as the European Payments Initiative, commenced in July and is anticipated to go to market in the EU the forthcoming year.
What does EPI depict?
The EPI’s primary objectives are to announce an end-to-end payment system created on an instantaneous transaction model. It will offer a card to clients, which permits them to carry out in-store, online, cash withdrawal, digital wallet and merchant payments, as well as peer-to-peer transactions.
“The solution aims to become a latest standard in payments … as an alternate to prevailing global payment solutions and schemes,” the EPI stated on its website.
“This initiative is in line with current situations from European public authorities influencing banks and payment service providers to figure a payment solution on top of the prompt payment scheme and to offer an alternate and independent payment system.”
Who is associated in the project?
Thirty-one banks across seven nations and two pan-European third-party acquirers – Worldline and Nets – are at present part of the project.
The creativity is open to more European banks, financial institutions and payment service benefactors who wish to join. Establishments can apply and link the EPI during the next window by the end of this year.
Gilles Grapinet, chairman and chief executive of France-based Worldline, stated that, “Almost 20 years after the introduction of the euro, the moment has come to join forces in a collective effort to provide consumers and merchants with a truly European digital payment solution.”
Why at present is the best time?
There have already been preceding attempts to test the dominance of US firms in this space, such as the Monnet Project encompassing 24 European lenders that launched in 2011, but these were not successful.
However, the EPI has the EU’s assistance. Its ambition is to provide a new standard of payments in Europe, offering an independent European alternative to the two major US payment companies.
By linking this initiative, European issuers and acquirers are aiding in firming up of the single market and the European digital agenda, Joachim Schmalzl, the chairman of the EPI board, stated the same.
“Our aim is to stimulate the growth of a unified Europe by continuously innovating in payments, which is an important underlying feature of our economy,” he added.
Martina Weimert, chief executive of EPI, stated that “The EPI will offer a payments administration corresponding to European needs and covering the diversity of our European markets on the consumer and merchant side.”
How huge is this market?
The overall transaction worth of digital payments in Europe is anticipated to range $1.17 trillion this year, bestowing to Statista. It is mounting at an annual rate of 13.4 percent and is projected to upsurge to $1.95tn by 2025.
Presently, nearly 80 percent of transactions in Europe are touched by Mastercard and Visa, rendering to EuroCommerce, a group of approximately 6 million retail, wholesale and other trading firms.
What is the Agenda?
The EPI is projected to offer a blueprint for a pan-European payments service by September, according to the Financial Times. “The first real-world applications – a system for electronic real-time payments between consumers – could be launched in early 2022, while a broader payments tool could follow in the second half of next year,” Mr Schmalzl told the FT.