European payments groups join forces to challenge US dominance
A customer disinfects the number entry pad before paying cashless at the Edeka grocery store in Duesseldorf, Germany, April 29, 2020. REUTERS/Wolfgang Rattay
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MADRID/PARIS/MILAN, Sept 30 : European payment groups serving 130 million people, including Spain’s Bizum, Italy’s Bancomat and Brussels-based Wero, said on Wednesday they were joining forces to create a cross-border payments network as Europe seeks to curb its dependence on Visa and Mastercard.
The companies will form a new joint venture, the European Network for Payments, which will be based in Madrid and connect national payment systems.
European policymakers have made payments sovereignty a priority as a fragmenting global order raises concerns over access to critical payments systems.
ENP’s founders are Bancomat, Bizum, EPI Company/Wero, SIBS-MB WAY and Vipps MobilePay, which together serve around 130 million users across 13 European countries, covering more than 70 per cent of the population of the EU and Norway.
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The network will connect existing payment systems through a common technical and operational layer based on European standards and instant account-to-account payments.
The payments group said European Central Bank plans for a digital euro by 2029, essentially an online wallet guaranteed by the ECB but operated by private companies including banks, could eventually complement their project.
Fragmentation has long been the “biggest hurdle” for European payment schemes, said Martina Weimert, CEO of the European Payments Initiative.
Fernando Rodriguez, deputy general manager for international expansion at Bizum, said ENP had already selected a new CEO and was planning to recruit staff.
Shareholders will need to absorb operating costs in the early years as the company builds infrastructure to achieve sufficient scale to generate its own fees, Weimert said.
Other European payment schemes could join in the future, the companies said, adding that a phased rollout will begin with cross-border person-to-person payments, followed by e-commerce and point-of-sale transactions.
“The creation of the European Network for Payments reflects a growing focus on connecting the payment systems Europeans already use, rather than replacing them,” said Marcel Hörauf, a partner at law firm Mayer Brown.
Hörauf said that whether this will translate into meaningful EU payment sovereignty depends on how Europe’s payment regulations develop, whether it gets accepted by merchants and whether it has political support from EU member states.
Source: Reuters
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