How do we get from “here” to EPI?

In this first blog Michael Salmony, Strategic Advisor at equensWorldline, gives his vision on the need to develop of a pan-European solution to harmonise the experience for the users across all member states and to leverage the economies of scale when pooling all the volumes of all national payment markets. In his second blog he will share a view on possible developments in The Netherlands.

In Europe, we currently have a large number of local payment schemes. Some are very successful: the French love paying with Cartes Bancaires, the German Girocard got another big push through the pandemic, the Polish mobile payment solution Blik is doing very well, as is the Spanish Bizum, some of the 50 (!) European P2P solutions are successful in their individual local communities, etc.. However these typically do not interoperate and some of them only work along specific channels (e.g. only online or only at physical POS). And that is only the consumer side - there are also, typically separate, dedicated B2B schemes (which are largely ignored in most discussions, even though that is where the money is). So, all in all, we have a very fragmented landscape.

Thus, someone wanting to buy something when travelling (or when buying online in another member state) often can not use his local preferred, accustomed and trusted method. The only pervasive cross-border option for the traveller is to use physical Euro cash notes, the typical cross-border option for the online shopper is to use Visa or Mastercard. The generic P2P answer is to use PayPal or Revolut.

Hence Europe – being the only zone in the World not to have its own pan-currency payment solution – is now developing a pan-European solution to harmonise the experience for the users across all member states and to leverage the economies of scale when pooling all the volumes of all national payment markets.

The leading initiative to build this is EPI, of which Worldline is a substantial supporter and shareholder, as we all have an interest in building a harmonized payment market for half a billion European consumers and over ten million European merchants to assure our deserved sovereignty versus other geographies across the world.

Europe is already leading the world in many areas of payment. All banks are connected, all subject to common addressing, have common SEPA transfer schemes, under a common governance, increasingly processing instantly and around the clock, typically free to the consumer, all cards have secure chips, two-factor authentication ensures informed consumer consent and reduces fraud … we here think all this is normal but many large geographies are still expensive, based on batch, on cash, on magnetic stripes, on paper cheques and can only dream of this.

Europe also leads the world in its payment regulation which is enforcing Open Banking across the entire industry and has established world-leading privacy regulations both of which are serving as role models being used as templates across the world. As a next step, Europe is now planning to build a connected “Data Market” across governments and industries, supported by new electronic identities for all. Within this already very positive environment, some areas are shining particularly brightly. The Nordic and Baltic countries are famous throughout the world for completely digitizing the financial supply chain (e-invoicing, e-tax, e-identity, e-sign, … “e-everything”) and showing what the digital and efficient future may look like for all. The Netherlands are another very positive example – watch this space …