All over Europe, people are increasingly paying by card or smartphone. A large part of the payments go through the systems of Mastercard and Visa.
(Photo: E + / Getty Images)
Frankfurt The decision to build a European payment system is getting stuck. Numerous financial institutions that have accompanied the project have so far refused to provide any money for the European Payment Initiative (EPI). According to financial circles, this also includes the cooperative DZ Bank and Commerzbank. In addition, money houses from Poland and Spain are skeptical.
The EPI interim company announced on Thursday that some banks, including some Spanish credit institutions, would not comment on the allocation of funds until January. According to insiders, all banks should actually accept or reject binding investments on Thursday night.
Now, however, the final list of banks and payment service providers that will eventually found EPI will be announced at the end of January or beginning of February, according to the interim company. “A majority of the banks from Belgium, Germany and France have confirmed their willingness to continue building up the EPI.” The EPI interim company did not comment on the position of individual participants.
In view of the low level of approval, the entire project now threatens to fail. A real European system could not be established with banks from only three countries. In addition, the costs for individual financial institutions are likely to rise significantly with fewer participants overall.
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Investments of 1.5 billion euros are planned for the years 2022 to 2026. 31 major European banks, including the German savings banks, and two payment service providers had started the EPI project and participated in the interim company. Its own payment system should make it less dependent on powerful US corporations such as Mastercard, Visa and PayPal.
The procrastination is annoying for the savings banks
With the initiative, the EPI proponents wanted to prevent the lucrative payment transaction market from being solely in the hands of Mastercard and Visa in the future. The two credit card companies and system providers are currently processing cross-border card payments, and some national card systems are based on the systems of the two companies.
The procrastination of numerous banks and especially German financial institutions is particularly annoying for the German savings banks. They backed EPI early on and released funds for EPI at the end of September – around 150 million euros at the time. In addition, further investments would be necessary for the EPI integration into the savings bank systems.
The interim company’s supervisory board chairman is Joachim Schmalzl, who is a member of the board of directors of the German Savings Banks and Giro Association. On Tuesday evening, Schmalzl appealed again to other banks – including the doubters from Germany.
The concept developed by the EPI interim company and the choice of technology are very good. “We also need EPI against the background that the data of the citizens are backed up according to European standards,” said Schmalzl. “That is why it is important that the most important providers in Germany decide to provide reliable support for EPI.”
New federal government supports EPI
In the past few weeks, doubts have been growing as to whether enough financial institutions will participate. There were intensive discussions with the Spanish financial institutions. According to financial circles, these had made relatively far-reaching demands for the development of EPIs, which was not particularly well received by some financial institutions from other Member States. In the meantime, it was even discussed that setting up the EPI would cost around four billion euros.
The previous plans provide that in addition to a physical payment card that is at least EPI-compatible, there should be a digital wallet – in technical jargon wallet – with digitized payment cards.
In addition, EPI wants to enable online payments as well as cell phone-to-cell phone payments and thus also oppose the online payment service PayPal. PayPal has a large market share for online payments in many European countries. The new payment system will be based on real-time payments.
The German traffic light coalition had made positive comments about EPI. “Europe needs an independent payment infrastructure and open interfaces for barrier-free access to digital financial services for all consumers and traders,” says the coalition agreement. The Bundesbank also supported EPI.
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