Some 16 banks from across the EU have said that they expect to have a “truly European” payments system up and running in 2022, to help digitise a region in which half of all retail payments are made in cash.
European Union policymakers and central bankers have long sought to develop a home grown rival to take on US titans Mastercard and Visa, as well as tech giants like Alipay and Google.
The European Central Bank (ECB) welcomed the lenders’ decision to launch the unified European payment system.
The ECB has consistently advocated for an industry-driven solution to compete with non-EU payments giants.
The central bank said last year that dependence on non-European players for two-thirds of non-cash payments created a risk that the payments market would not be fit to support the EU single market and euro.
Thierry Laborde, deputy chief operating officer at French bank BNP Paribas, which is part of the payments project, said it was “aimed at strengthening Europe, at making it more independent and robust”.
“We will do it collectively, by pooling our resources. As for distribution systems, prices will differ from one bank to another, but the infrastructure will be pan-European,” he said.
The so-called European Payments Initiative (EPI) aims to become a new standard means of payment, offering a card for consumers and retailers across Europe, the 16 participating banks said in a statement.
It will cover all types of transactions including in-store, online, cash withdrawal and ‘peer-to-peer’ in addition to existing international payment scheme solutions.
Banks that have already signed up include BNP Paribas, Commerzbank, Deutsche Bank, Santander, ING, UniCredit and Societe Generale.
In coming weeks the project will set up an interim company in Brussels, with other payment service providers invited to join, the lenders said.
“EPI’s objective is to offer a digital payment solution that can be used anywhere in Europe and to supersede the fragmented landscape that currently still exists,” the banks said.
The statement added that the Covid-19 crisis — which has seen usage of cash plummet in favour of contactless payments — “has underlined the need for a unified European digital payment solution”.