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Martina Weimert, the European Payments Initiative (EPI) chief executive, let her feelings be known loud and clear about the EU authorities pushing for the pan-EU payments project, telling them that the private sector cannot be the only ones footing the bill.
The EPI has had an increasingly tough time of it in recent months as 20 of its 33 member banks quit the project, including all Spanish shareholders and German banks Commerzbank and DZ Bank.
Partly as a result, the initiative has scaled back its plans, including deserting efforts to create a card scheme to rival Visa and Mastercard in Europe. It will instead focus on developing a digital wallet using instant payments.
Although nobody said it would be easy, Weimert appeared to point at least some of the blame toward the public authorities during a panel discussion at Money 20/20.
“The ideal situation would be to have everything financed privately, but let’s be honest, we are in a situation where Europe needs to catch up,” she said. “We are in front of financial giants.”
Even when there are big European banks and acquirers involved, it is challenging being able to get to the market, she said. “It is a huge challenge.”
“On the other side, we have the public authorities who come up with a political agenda. By the way, we have two retail payment strategies in Europe, one at the Commission, one at the European Central Bank,” she exclaimed. “We’re supposed to satisfy both.”
This means that the EPI needs to be European, satisfy political goals and assert sovereignty, Weimert continued. “But, where is the support on the political side for the financing?”
“You say you want a European solution? You want independence? You want the market to catch up? You want to be quick? Well then, support it financially.”
Weimert’s not so subtle critique of the EU’s financial regulators and ministries did not stop there either, with the former Oliver Wyman consultant calling out the lack of willingness for the EPI to accept foreign investment.
She continued: “You ask us for certain things. You ask us to apply certain principles. You ask us for European governance. I can only tell you my life would be much easier if we could accept American or Chinese investors, but you want to be independent, it is a political goal.”
Political authorities should financially support this, she conveyed. “They are asking for things in exchange and while they do it in other areas, look at what happened in the battery sector. All of a sudden, there was a lot of public money available.”
Daniel van Delft, chief executive of iDEAL, the e-commerce payments system in the Netherlands, warned that such a move may unveil further problems for the EU.
This would disrupt a level playing field, he said. “We have to be very careful in terms of setting the governance and the landscape for Europe going forward, because we don’t want to end up in Brussels with a lot of litigation going on.”
He urged caution, while recognising that restrictions do mean that international investors are unable to get involved with the EPI.
This is not the first time that Weimert has lobbied regulators for support.
In 2021, she asked for a so-called regulatory pause that would prevent the EPI and its shareholders from having to grapple with new compliance costs as it began to launch.
Whether Weimert and the EPI are having any luck with their interventions remains to be seen. The EU’s regulators, both national and supranational, have been huge cheerleaders for the project, with it regularly getting a mention from commissioners such as competition chief Margrethe Vestager and financial services commissioner Mairead McGuinness.
Additionally, it was referenced outright in the European Commission’s 2020 Retail Payments Strategy. Yet, whenever it is mentioned, EU representatives will strongly emphasise that it is a private sector project, which may be a sign that Weimert and the remaining 13 shareholders will not be receiving state-backed investment anytime soon.
