Europe’s 30 largest banks are developing a unified payment system, The Bell reports quoting the Financial Times.

They have until September to draw up a blueprint for a pan-European payments service that can be used to pay online as well as in stores, to settle bills between individual consumers and to withdraw cash at ATMs. Investors will then decide on further financing.

“The idea is to build a European payment champion that can take on PayPal, Mastercard, Visa, Google and Apple,” said Joachim Schmalzl, the chair of the European Payment Initiative.

According to him, the initiative will require several billion euros worth of investments. EPI has so far received more than €30m from its backers. The electronic payment system could be launched in early 2022, while a broader payments tool could follow in the second half of next year.

The work aimed at building the payment system started nine months ago. A group of 16 major European banks from Germany, Belgium, Spain, France and the Netherlands paved the way for the future launch of the European Payments Initiative (EPI). The project already has the backing of the European Commission, the European Central Bank as well as the euro area’s financial regulators.



Burkhard Balz, a Bundesbank board member, said that Germany’s Central Bank supported the EPI, which “would strengthen the strategic autonomy of the EU in the payments market, enhance competition and thus improve consumer choice”.

A Deutsche Bank spokesperson said that a European payment scheme was needed “to remain independent”, and that Germany’s largest lender had joined the initiative “to support this joint effort of European financial institutions”.

Card payments in Europe are predominantly processed by US-based companies, Financial Times reports. Four in five transactions in Europe are handled by Mastercard and Visa. Schmalzl warned that such a dominant market share could hurt consumers and merchants, pointing to relatively high fees as well as questions over data protection. “We want to offer an alternative to this oligopoly and give merchants and consumers in Europe a real choice,” he said.

Previous pan-European attempts to challenge the US supremacy in payments have failed miserably. The “Monnet Project”, which in 2011 was backed by 24 European lenders, faltered because it lacked political backing and failed to develop a viable business model.

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