The creation of EPI and the need for a consistent pan-European payment experience

During Sibos 2020, a new initiative has already been named several times: the European Payments Initiative, also known as EPI. This initiative was launched by a group of 16 major European banks from five countries (Belgium, France, Germany, the Netherlands and Spain) and aims to create a uniform payment solution for consumers and merchants across Europe. 

One of the participants is the French international bank BNP Paribas. In this blog, Carlo Bovero, Global Head of Cards and Innovative Payments at BNP Paribas, explains the benefits of EPI, why this initiative is necessary and what the next steps will be.

Why is the creation of the EPI so important?

Bovero: “For various reasons. First of all, the payment market is a global business. Without volume it is difficult to be competitive. There are several domestic schemes in Europe, but they are all different and too small to compete in the global market. Secondly, payments are a strategically important business for Banks. Trough payments we can communicate with customers. Without the ability to manage payments we risk losing the connection with our customers, especially now that new players from Asia and the US are entering the market. Thirdly, we see the demand from the European Commission and the ECB for the creation of a true Single Euro Payments Area (SEPA) for payments. This does not yet exist. Fourthly, we can do better for merchants and consumers. We can really create something new that is useful for our customers. This is an opportunity to come up with something innovative.”

Why is BNP Paribas taking part in the initiative?

Bovero: “Apart from what I said before, BNP is a French bank with a lot of reach in other European countries. In fact, we are a European Bank with a European DNA. We also have a strong focus on payments. We have many issuing activities in Europe, and we have, for example, strong acquiring activities in France and Italy. Payments are an important part of our business model. That means we have a lot of different processing solutions in each of our countries and we use many different platforms and local solutions that are tailored to the domestic market. It would be ideal for us if we were able to use EPI to process all these individual solutions into one synergistic system.”

How does the rollout look?

Bovero: “We have just set up an interim company in Brussels. They will make clear agreements on the deliverables, including the completion of the technical and operational roadmap. However, it will take some time before we will see the first EPI transactions: we’re targeting end of 2021 for some first technical tests and the launch of an MVP in S1 2022. The ambition is to have a market share of 60 to 65 percent by 2025 in the 5 countries where the participating banks are active. After payments, we may also focus on other topics, such as digital identity and seamless data exchange. We are happy to have a discussion about this in a later stage.”

Do you also see demand from merchants and consumers for pan-European payment solutions?

Bovero: “They do ask for something that is easy and safe to use. Most are looking for one consistent European experience. In the area of cards, we see that the current domestic card schemes offer a European and globally consistent experience, but in reality, this experience also appears to be slightly different everywhere. Paying with an NFC chip also gives a different experience in different countries. And in ecommerce we even see many local, different solutions. There is a real need to build something with the same European experience. Using a card is indeed easy, but we can do better and our digital wallet will be born to be European from the beginning.”

To summarize: BNP Paribas sees this as a big step forward?

Bovero: “That is absolutely true, we are completely convinced by this initiative. It is not only a step forward for banks, but also for European clients and merchants. We really think we can build new and digital value-added services.”