European payment system project comes to fruition

The project had been on track for several months. In 2018, the European Central Bank (ECB) wanted a European payment standard to be created, to have an alternative against the American giants Visa and Mastercard and the new Chinese players who are gaining ground.

→ READ. Banks working on a European payment system

Thursday July 2, this project takes shape. Sixteen European banks, from five different countries (France, Germany, Spain, Belgium, Netherlands), are launching the foundations of what will be the future European payment standard called the European Payment Initiativ (EPI). In France, among others, BNP Paribas, Société Générale and Crédit Agricole are participating in the project.

Payment sovereignty

This new structure would process payments without passing, as is the case today, through the American acceptance networks Visa or Mastercard. Today, a payment by bank card of a Frenchman traveling in Spain transits via Mastercard or Visa. And all the data that goes with it (banking information, nature of the purchase, etc.).

« Each new payment standard is imposed by these American giants, notes a banker close to the matter. PPE would offer an alternative to Europe, better control of transactions and their confidentiality. »

Alongside the ECB, the European Commission supports this project: “The Commission has always publicly encouraged and called for the emergence of innovative payment solutions of European origin and pan-European scope, develops a source from the European Commission. And to specify that the commission will present ” a strategy for a European payments market in the autumn ».

This European payment standard may therefore eventually replace the American acceptance networks Mastercard and Visa, as well as national networks. In France, it is the grouping of Bank Cards. Its “CB” logo appears, like those of Visa and Mastercard, on French bank cards.

Innovation challenge

« There nnational systems and the PPE project must not be opposed on the one hand, emphasizes nevertheless this banker close to the file. This transition from national to European can be smooth. Leaving the national framework, the skills of European countries will be pooled to have a greater strike force. In France, the monetary authorities see this European project with a good eye.

→ READ. Bank card: payment at your fingertips

Behind this sovereignty issue, PPE is also a challenge in terms of innovation for Europe. ” It must show that it is not only a consumer of other people’s payment solutions but that it is also a force for proposals. It’s a project in line with its digital agenda “, Continues this banker.

According to his information, the project wants to be adapted to new consumer uses: e-commerce, instant payment, payment from individual to individual (known as “P2P”)

A long procedure

Technically and financially, ” linvestment in such a project is very important. It’s a European solution, not a little “fine tech” that launches in its corner “, Emphasizes this banker. The new payment system will be based on several structures, including TIPS (Target instant payment settlement), an interbank structure launched by the ECB in 2018.

The procedure will take time, warns this source close to the file: ” This project is supported by five countries to have a basic critical mass from the start. They concentrate the majority of European transactions. But to succeed, it will be necessary to expand with a round table with other European countries. »

And to be recognized internationally, again, the reputation of this European payment system has to be built. ” We will start by collaborating with Visa and Mastercard to operate outside Europe. We cannot impose this standard of payment overnight outside. The project will have to prove itself. »

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