On Tuesday, a planned pan-European payments network supported by 22 banks to compete with Mastercard and Visa in the United States requested state funding, claiming that its private supporters were unable to provide all of the funds required.
The European Payments Initiative (EPI) was formed last year with the goal of bringing on board additional banks and other payment operators by December in order to finalize preparations to begin rolling out its instant and card payments network.
“Public funding would be nice,” EPI Chief Executive Martina Weimert told an event held by the European Payments Institutions Federation. “Let’s not hide it – it’s going to be a massive investment. It’s expensive.”
Retailers say they are not ready to pay for it, while banks and other EPI shareholders “can carry only so much”, Weimert said, without giving details on the investment needed.
The initiative is backed by 22 banks from seven EU nations, including France, Germany, and Spain, including Deutsche Bank (DBKGn.DE), UniCredit (UCCDB.UL), BNP Paribas (BNPP.PA), ING (INGA.AS), Societe Generale (SOGN.PA), and Sabadell.
The European Union has a strong desire to gain strategic autonomy in financial services, such as by reducing reliance on Mastercard and Visa from the United States for cross-border card payments. It’s unclear if this will include financial support for EPI.
EPI, according to Weimert, is now in a “critical phase” of decision-making in the next weeks.
It will build a new system and largely replace a plethora of national systems to reduce fragmentation and overlaps in payments, she said, aiming to launch in 2022 peer-to-peer transactions based on instant payments, followed by e-commerce.
“It is a major shift so it will take time. Anybody who tells you it’s an easy call and let’s do it quick and dirty, well it’s not really looking to transform the European ecosystem,” Weimert added
