Great potential or unnecessary? EPI payment system to be launched

Finances - Great potential or unnecessary? EPI payment system to be launched

Bundesbank board member Burkhard Balz believes in the success of the uniform pan-European payment system EPI, which will be launched in 2024. "I see great potential. Germany, France and Benelux are already represented. I have heard from the EPI managers that there are intensive talks 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 it is particularly important in such turbulent times that there is a European payment system on a private basis and that Europe is thus more independent of non-European providers in payment transactions."

In mid-December, after years of effort, the EPI banking initiative took a decisive step towards the introduction of 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) using the "Wero" smartphone app. The aim is for consumers to gradually be able to use the "Wero" digital wallet to pay in online stores 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 joint payment system in Belgium, France and Germany for early 2024 and held out the prospect of a later expansion to other countries.

EPI was founded in 2020 by major euro banks from Germany, France and Spain, among others. They wanted to establish a standardized Europe-wide system that covers payment by card and smartphone in order to offer customers a competitive offering to powerful US companies such as PayPal. The initiative is currently supported by 16 financial service providers, including Deutsche Bank, DZ Bank and the 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 more European independence when it comes to payments. However, it has not yet been decided whether and when this will be introduced.

Many supporters have dropped out

31 banks and 2 payment service providers took part in the EPI interim company. However, many supporters later dropped out - for example Commerzbank. Its head of private customers, Thomas Schaufler, is skeptical: "As a consumer, I personally don't see any need for a new payment system. I have not yet realized what problem EPI solves: the existing payment systems work," Schaufler told the German Press Agency. "A Europe-wide payment system must also work Europe-wide. If important countries do not participate, it is not a European solution."

Joachim Schmalzl, member of the Management Board of the German Savings Banks Association (DSGV) and Chairman of the EPI Board of Directors, expressed his 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 versatile ecosystem and user orientation."

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1. The launch of the EPI payment system in 2024 is highly anticipated by Burkhard Balz, a member of the Deutsche Bundesbank's board, who sees great potential in the uniform pan-European payment system.
2. The EPI payment system, once launched, could make Europe more independent from non-European providers in payment transactions, as it would be the first pan-European system operating on a private basis.
3. In mid-December, EPI took a significant step towards introducing the payment system with an initial practical test, involving a real-time transfer of ten euros between German and French banks using the "Wero" smartphone app.
4. EPI, founded in 2020 by major euro banks from Germany, France, and Spain, aims to offer a competitive offering to powerful US companies such as PayPal through a standardized Europe-wide system covering card and smartphone payments.
5. Despite the backing of 16 financial service providers, including Deutsche Bank and DZ Bank in Germany, and major banks from countries like France and the Netherlands, there have been withdrawals from the project, such as Commerzbank.
6. Addressing the German Press Agency, Commerzbank's head of private customers, Thomas Schaufler, expressed his skepticism about the need for a new payment system, believing that existing systems are already functioning adequately and that the EPI must work effectively across all participating European countries to be successful.
7. With confidence, Joachim Schmalzl, a member of the Management Board of the German Savings Banks Association (DSGV) and Chairman of the EPI Board of Directors, asserted in December that gaps in the EPI system can still be addressed and that the "Wero" digital wallet is set to become an indispensable part of European daily life and the digital economy.

Source: www.stern.de