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Dutch merchants are interested in an offline digital euro as long as it is not expensive, but know little about the currency, a survey by De Nederlandsche Bank (DNB) has found.
The survey of more than 1,000 merchants found that awareness of the central bank digital currency (CBDC) remains low, with nearly half of respondents (46 percent) unaware of it.
A further 43 percent of respondents said they had heard of it but did not know what it was, and just 11 percent considered themselves well informed about the digital euro.
The limited awareness is consistent across sectors and merchant sizes, and is likely due to the failure of European legislators to reach a political agreement on the currency and launch an active communication campaign, the DNB said.
The DNB noted that EU member states, the European Parliament and the European Commission must still negotiate legislation that would enable the introduction of the digital euro.
“The digital euro would strengthen Europe’s strategic autonomy in payments by offering a public payment option that operates autonomously and alongside non-European payment service providers and large international tech companies,” the central bank said.
“At present, such strategic autonomy is lacking: in many countries – including the Netherlands – non-European firms play a critical role in the retail payment infrastructure.”
Expense fears
Expense is the key concern for merchants, with more than three-quarters of respondents saying they fear transaction fees for digital euro payments could be higher than existing options.
They also expressed reluctance to invest in the software and payment terminals to support the digital euro.
Respondents said they thought the costs of using the currency should be equal to or lower than existing payment methods, and that they would like to continue using their current payment infrastructure and devices.
One of the key advantages of an offline digital euro would be the ability to keep payment transactions running during network outages, as it can operate without an internet connection, either on a smartphone or via a payment card.
Good news and bad news
The survey results are both good news and bad news for proponents of a digital euro.
On the positive side, Dutch merchants’ interest in using the offline digital euro complements earlier research, which found that Dutch consumers are open to using the digital euro.
However, the lack of awareness of the digital euro among merchants highlights the difficulties in launching the currency.
The European Central Bank (ECB) has reiterated its belief in the value of a bloc-wide digital currency, but has met with scepticism among lawmakers, despite efforts to win them over.
Digital currency is an increasingly important topic in the bloc, as concerns grow about European payments sovereignty.
In March, a report on the European card payments market suggested that the EU’s continued dependence on international card schemes such as Visa and Mastercard, and on foreign-owned payment processors, is a threat to the bloc’s financial sovereignty.
These concerns have been exacerbated by past tensions with the Trump administration and the EU’s strained relations with Russia and China.
Europe lacks a continent-wide local card network, but the digital euro could present an alternative way to ensure payments sovereignty in a volatile world.
