The European Union should continue working on a pan-European payment solution based on instant payments and a digital euro to avoid relying on United States credit card networks and Big Tech companies for retail payments.
This was the main message that Fabio Panetta, board member of the European Central Bank (ECB), delivered Thursday (June 16) at the European Payment Council’s 20th anniversary conference.
The keynote speech was aimed at highlighting the importance of public-private collaboration in the next stage of European payments. Panetta started by acknowledging the success of private-public collaboration at the wholesale level with the creation of the Single Euro Payments Area (SEPA), a network that allows making credit transfers and sets up direct debits across Europe.
But the same success is yet to be replicated at the retail level, where more challenges remain, Panetta argued.
Whereas SEPA has been a success, with over 43 billion payments made every year, the SEPA instant credit transfers (SCT Inst) scheme is not there yet, he explained.
“We need to implement SEPA for card, online and mobile payments in order to eliminate the residual fragmentation that is hampering or even preventing European customers from using their national payment solutions in all European markets,” he said. This push for a European instant payment network would “help avoid our retail payments market needing to rely on non-European providers to offer pan-European solutions, which is the situation we currently have for card payments.”
The risk of not meeting user’s demand for innovative payments is that others will fill this gap, which may raise more fundamental concerns, he said. The rise of Big Tech companies taking a greater role in providing front-end solutions to customers presents two threats. First, European companies and the European market may be less competitive. Second, leaving a crucial sector like payments in the hands of non-European companies that may not necessarily share Europe’s societal and strategic goals may cause deeper problems.
Following the success story of the private-public collaboration that made SEPA possible, Panetta encouraged the European Payments Council to continue its efforts to work with private companies to adopt the new SCT Inst scheme. But if financial institutions (FIs) and payment service providers (PSPs) fail to achieve this goal, Panetta also said regulators could “step up their role once again, working even more closely with European intermediaries to achieve [the EU’s] strategic goals for retail payments.” In other words, regulators could adopt new rules if necessary.
Digital Euro
Panetta is leading the efforts at the ECB to develop a digital euro, and he advocates for the benefits of the central bank digital currency (CBDC) at each opportunity. On this occasion, he noted that financial intermediaries will have a crucial role in distributing and promoting the digital euro.
By design, the digital euro will not crowd out existing private financial instruments, Panetta said, it rather will preserve the coexistence of central bank money and private money.
The U.S. and the United Kingdom have not made a public decision regarding whether a retail CBDC will be issued, but Panetta seemed confident about the benefits of a CBDC for the European payment system, saying a digital euro could provide the rails that Europe needs to establish a pan-European private retail payment solution.
He also said that in the coming months, the ECB will step up its interaction with the private sector to explore the links between these two projects, the EU instant payment scheme and the digital euro to implement the European retail payment strategy.
See also: EU Regulators Lash out at Stablecoins While Boosting CBDCs
"payment" - Google News
June 17, 2022 at 04:22AM
https://ift.tt/9kuc8e1
ECB’s Panetta Urges Firms to Adopt EU Instant Payment Solutions - PYMNTS.com
"payment" - Google News
https://ift.tt/dHKW4tB
https://ift.tt/7JwBDjt
Bagikan Berita Ini
0 Response to "ECB’s Panetta Urges Firms to Adopt EU Instant Payment Solutions - PYMNTS.com"
Post a Comment