Finance: Great potential or unnecessary? Payment system EPI is to start

Bundesbank board member Burkhard Balz believes in the success of the uniform Europe-wide payment system EPI, which will be launched in 2024.

Finance: Great potential or unnecessary? Payment system EPI is to start

Bundesbank board member Burkhard Balz believes in the success of the uniform Europe-wide payment system EPI, which will be launched in 2024. "I see great potential. Germany, France and Benelux are already represented. I hear from those responsible at EPI that there are intensive discussions with interested parties from other European countries," Balz told the German Press Agency in Frankfurt.

"EPI would be the first pan-European payment system. I believe that, especially in such turbulent times, it is important that there is a European payment system on a private basis and that Europe is therefore more independent of non-European providers in payment transactions."

In mid-December, after years of effort, the banking initiative EPI took a decisive step towards introducing the payment system with an initial practical test: a real-time transfer of ten euros in seconds from an account at Sparkasse Elbe-Elster to an account at the French Banque Populaire - Caisse d'Epargne (Groupe BPCE) with the help of the smartphone app “Wero”. The aim is for consumers to gradually be able to use the “Wero” digital wallet to pay in online shops and at the checkout, for example.

Market launch planned for 2024

In April, the European Payments Initiative (EPI) announced a “broader market launch” of the common payment system in Belgium, France and Germany for the beginning of 2024 and held out the prospect of later expansion to other countries.

EPI was founded in 2020 by large euro banks from Germany, France and Spain, among others. They wanted to build a uniform Europe-wide system that covers payments by card and smartphone in order to offer customers a competitive offer to powerful US companies such as Paypal. The initiative is currently supported by 16 financial service providers, including Deutsche Bank, DZ Bank and DSGV. It also includes major banks such as BNP Paribas and Société Générale from France as well as ABN Amro and ING from the Netherlands.

The Euro central banks' project for a digital euro is also about greater European independence when it comes to payments. However, it has not yet been decided whether and when this will be introduced.

Many supporters dropped out

31 banks and 2 payment service providers took part in the EPI interim company. But many supporters later dropped out - for example Commerzbank. Their private customer boss Thomas Schaufler is skeptical: "As a consumer, I personally see no need for a new payment system. I haven't yet recognized what problem EPI solves: the existing payment systems work," Schaufler told the German Press Agency. "A Europe-wide payment system must also work across Europe. If important countries don't participate, it's not a European solution."

Joachim Schmalzl, board member of the German Savings Banks and Giro Association (DSGV) and chairman of the EPI board of directors, expressed confidence in December that gaps can still be closed: "We are convinced that Wero will become an indispensable part of everyday life in Europe and will play a central role in the digital economy in the long term thanks to its diverse ecosystem and user orientation."

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