Euro Banks Seek To Form Unified Pan-European Payment System To Challenge Visa, Mastercard
A group of sixteen banks from euro zone countries are spearheading the project
The new system is expected to be up and running in two years
The project hopes to eventually control at least 60% of electronic payments in Europe.
A group of sixteen banks from euro zone countries said they will establish a "truly European" payments system that is designed to completely digitize a region where one-half of all retail transactions are still conducted in cash.
The new system, called ‘European Payments Initiative,’ or EPI, is expected to become operative in 2022 and would challenge the market dominance of U.S.-based payment firms Mastercard (MA) and Visa (V).
"It is aimed at strengthening Europe, at making it more independent and robust," said Thierry Laborde, deputy chief operating officer of France’s BNP Paribas, which is involved in the project. "We will do it collectively, by pooling our resources. As for distribution systems, prices will differ from one bank to another, but the infrastructure will be pan-European."
Laborde added that the major innovation arising from the project will be that people and businesses will be able to make payments throughout Europe “seven days out of seven, instantaneously and, for example, with the telephone number of the beneficiary.”
The cards that will be provided to consumers and retailers across Europe will cover various kinds of transactions, including in-store, online, cash withdrawal and 'peer-to-peer.’
Other banks involved in the enterprise include BBVA (BBVA), Commerzbank, Deutsche Bank (DB), Santander (SAN), ING Group (ING), UniCredit and Societe Generale.
The project, which is expected to cost several billion euros, seeks to eventually control at least 60% of electronic payments in Europe.