Germany’s second largest private bank has released funds for EPI. At a meeting of all institutes involved, a decision is now to be made as to whether the project will be implemented.

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Building a new, common European payment system would require billions in investment.

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Frankfurt The German banks are behind the development of a new European payment system with which the institutes want to become more independent from powerful US corporations such as Mastercard, Visa and PayPal.

After the savings banks, Commerzbank has now also released the funds for setting up the European Payments Initiative (EPI), several people familiar with the topic told the Handelsblatt. The decision has a signal effect, because Commerzbank has long been considered a shaky candidate among German financial institutions.

According to insiders, DZ Bank, which is involved in the EPI interim company on behalf of the cooperative financial sector, will not officially decide on its course of action until Monday morning together with the owners, the Volksbank and Raiffeisenbanken. At the moment, however, everything indicates that the comrades will also release the necessary funds.

Commerzbank, DZ Bank and the Federal Association of German People’s and Raiffeisen Banks did not want to comment on this. Deutsche Bank had already announced at the end of October that it would support the joint efforts under the umbrella of EPI.

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Whether EPI is actually implemented depends on whether there are enough institutes from other EU countries to take part in the project and participate in the planned investments of almost 1.5 billion euros.

Decision to start the week

According to Handelsblatt information, a fundamental decision is to be made on Monday afternoon at a meeting of the 31 banks and two payment service providers that are involved in the EPI interim company.

At a meeting at the end of October, the institutes were unable to agree on the release of the required investments. Approval from around 80 percent of the participants would have been required for implementation. At the upcoming meeting on Monday, according to insiders, those involved would be satisfied if two thirds would give the green light to make the investments necessary for EPI.

Until recently, the Dutch and Spanish financial institutions in particular had reservations. However, people familiar with the subject are confident that, after a series of bilateral talks over the past few weeks, there will be enough commitments in the end.

Backed by the traffic light coalition

Proponents of the EPI rate it positively that seven EU countries recently issued a position paper in favor of a uniform European payment system.

In addition to Germany, the signatories included France, Poland, Finland and Belgium. Most recently, the focus has been on the Spanish and Dutch financial institutions, which have been said to be skeptical of investing in EPIs.

In contrast, the German traffic light coalition rates the project positively. “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.

Counter-draft to US competition

With EPI, the European banks want to prevent the lucrative payment transaction market from being in the hands of US companies such as Mastercard and Visa in the future.

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. The new payment system will be based on real-time payments.

More: Girocard soon without Maestro function: Mastercard expires system for international payments.

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