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The European Payments Initiative (EPI) will not be easy to fulfil but that does not mean it is not necessary, Martina Weimert, the interim company's chief executive, has said.
The EPI is not in the business of ticking boxes, said Weimert, while providing new insights of what is happening with the EU’s latest attempt at launching a pan-EU payments scheme.
“No, we don’t want to be like Visa or Mastercard, no we don’t want to be like PayPal nor Apple Pay. We are trying to deliver a unified, interesting, value-adding solution to Europe and not to enter into this or that category,” she said.
The EPI is a scheme, a brand, different products and one solution, she summarised. “That is the general concept and of course, we will work on value-added services and we will start with instant financing but in the future, will also integrate things like the digital identity and the digital euro hopefully.”
There are many more services to come because there is appetite, she said, noting the research that the company has undertaken so far. “The interest is not absolutely everywhere at the same level, with the same services but in general, there is a common direction that we can see coming from the various EU markets.”
The EPI will be a tailor-made, European service, she declared.
In 2022, the EPI will launch its instant payments service and begin to delve into e-commerce. However, the market must be patient, she warned.
“This is a major shift, and it will take time. Anybody that is looking for an easy call, and something that is done quick and dirty, is not looking to transform the ecosystem in Europe.”
Ever since its launch in 2020, both the EPI’s interim company and its supporters, among them the political class of the European Union, as well as financial supervisors such as the European Central Bank, have urged caution. This is due to the extent of the work that needs to be done.
However, this has not stopped people from becoming concerned about the lack of new announcements since the summer, with some even suggesting that the EPI is likely to fail.
For now, Weimert focused on the fact that there is a political and economic need for the autonomy that the EPI could offer the EU’s payments ecosystem, which currently relies on international providers such as Mastercard and Visa.
“It’s a rather crowded market already, but nevertheless, we don’t have any EU retail payments solutions,” she noted.
She also suggested that government support should go further than just verbal endorsements.
“I will not hide it that public funding would be nice,” she conceded. “Let’s not forget that we are trying to build a new ecosystem here, which should also substitute at, at a certain point, national solutions and national schemes.”
National payment schemes have been a hit in many EU countries, such as the Netherlands, whose payment system, iDEAL, processes around 50m payments per month.
This is, of course, not our decision but the decision of the shareholders of these national solutions, Weimert acknowledged. “But, if we really want to overcome fragmentation and we really want to realise the synergy potential that we definitely see, then we need to get rid of these multiple implementation processes.”
In the past, it has been assumed that national payment schemes will merge into the EPI, and the schemes themselves have shown an interest in the potential of the project.
Weimert also discussed the relationship that the company has with regulators, something which has been long deemed cosy by the EU’s payments community.
However, it appears that she has stepped back from a previous call for a regulatory pause during the development and implementation of the EPI.
“The regulatory environment is very important for us, of course we want to be fully compliant with all European rules,” she said.
The way that the EPI addresses this is through, firstly, taking its chances, she said. “In the sense that, yes, if you want to be hundred percent safe then you better stay out of payments. You need to be a risk-taker, which is one of the concerns that one might have with the EPI. Yes, it is a risk.”
The regulatory environment will evolve, she continued. “What we do is we try and show them the concrete impacts.”
For example, the current anti-money laundering (AML) framework will not allow for instant payments to become successful, she pointed out. “We tried to analyse what would be happening with current rules. There would be a lot of failures and merchants don’t like failure rates, so we try to make it clear what needs to change.”
This has included entering into an active dialogue with the regulator, she said. “We are trying to make them realise what the impact of these changes means. What does it mean for a newcomer like us?”
This kind of relationship is needed as the environment is incredibly challenging, she said. “The public and the private sector here need to support each other.”
