The central institution of the Volks- und Raiffeisenbanken is withdrawing from the European Payments Initiative.
(Photo: dpa)
Frankfurt The construction of a new EU payment system (EPI) threatens to fail. DZ Bank finally canceled its participation in the prestige project on Tuesday, as two people familiar with the topic explained to the Handelsblatt. The leading cooperative institute did not want to comment on this.
The withdrawal of DZ Bank is a major setback for EPI, after all the cooperative financial institutions make up around a third of the German banking sector. The savings banks and many other participants had tried until the very end to persuade DZ Bank to participate – but without success.
With the withdrawal of the comrades, it is highly uncertain whether EPI will be established at all. According to those involved, a fundamental decision on this could be made by Friday.
EPI was founded in 2020 by several major banks. The aim was to create its own payment system in order to become more independent of powerful US corporations such as Mastercard, Visa and PayPal. By 2026, those involved are calculating investments of around 1.5 billion euros.
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Several governments and central banks support the project because they believe it would be important for strengthening the European financial market. “We support EPI politically to the best of our ability, also in contact with other actors in Europe,” said Florian Toncar, Parliamentary State Secretary in the Ministry of Finance, at the beginning of February. “But we don’t spend any tax money on it. The project has to be privately funded.”
Cancellation or slimmed down version?
This was a disappointment for many banks. They had hoped that they would be able to receive European funding from the federal government to set up EPI. The institutes argued that EPI is important for strengthening the European financial market and therefore deserves to be promoted like other infrastructure projects.
31 banks and two payment service providers are involved in the EPI interim company. However, many of the institutes have since turned their backs – including Commerzbank and several Spanish financial institutions.
“The remaining range and relatively high initial investments are no longer consistent – the essential prerequisites for a strategic investment are therefore not met,” Commerzbank explained in mid-January. “As a result, we will not participate in EPI at this time.”
In the Federal Republic of Germany, Deutsche Bank and the savings banks have so far stood by EPI. Financial institutions from France, Belgium and the major Spanish bank Santander have also confirmed their participation. If these institutes stick to the project despite the withdrawal of the cooperative banks, they would face higher costs – and they would probably only introduce a slimmed-down version of EPI at first.
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