A merchant perspective on the digital euro

From your perspective as a merchant, how do you view the potential introduction of the digital euro?

As part of Europe’s leading retail group, with extensive digital and physical touchpoints, especially across Lidl and Kaufland, we fundamentally welcome the digital euro initiative. We view it as a strategic opportunity to foster a more sovereign European payment landscape – resilient, competitive, and independent. 

Crucially, the digital euro acts as a vital enabler for digitalization across Europe. Our strong expectation and hope is that the digital euro will finally provide a Europe-wide uniform payment method regarding both technology and processes. A European digital currency could successfully drive significant retail innovation. Furthermore, the digital euro should also set an example of sovereignty.

Spotlight interview profile:

Tobias Kühner is the Head of Finance Operations at Schwarz Corporate Solutions. With over 25 years of experience within the companies of Schwarz Group, he is a seasoned expert in the fields of finance and payment operations.

What tangible benefits would make accepting the digital euro attractive for merchants?

For a high-volume retailer like the companies of the Schwarz Group, the decision to accept a new payment method hinges on several operational pillars:

• Consistency, simplicity, security: A simple and uniform implementation across all European countries. The ability to pay offline with payment security is a resilience component and a great advantage for the European payment infrastructure. Furthermore, a seamless customer journey, combined with data protection and data security, is a key component of the implementation process.
• Cost transparency and simple structure: Rather than focusing purely on eliminating fees, our priority is also achieving total cost transparency and a simple, manageable cost structure across all markets.
• Instant settlement: Direct, real-time liquidity settlement into our merchant accounts would greatly optimize our working capital management. It is important that the settlement process is simple and efficient.
• Operational excellence: The digital euro should bring operational excellence and customer satisfaction to our daily business. A seamless, universally trusted public payment standard can reduce checkout friction, lowering cart abandonment rates online while speeding up checkout times at physical points of sale.

What are merchants’ expectations regarding ease of integration into existing point-of-sale and online payment systems?

Operating thousands of brick-and-mortar stores alongside e-commerce environments means integration must leverage existing standards. We expect the digital euro to plug seamlessly into our current POS terminal hardware, payment gateways, and marketplace APIs. Implementation costs must be reasonable, and a realistic assessment is necessary. Furthermore, merchants should be involved in process definition and testing.

Our experience with deploying innovative payment systems – such as our own mobile payment solution within the Lidl Plus app – shows that the biggest hurdle is not just writing the software, but managing terminal software deployment, ensuring strict compliance across different EU jurisdictions, and minimizing transaction processing latency at the lane. The digital euro should support standardized checkout procedures. This would ensure fast and seamless transactions in high-volume grocery retail environments, such as ours, and encourage broad customer acceptance.

How does a consistent customer experience across different channels impact the adoption of payment solutions?

It is absolutely critical. Modern retail is inherently omnichannel. Customers expect to transition seamlessly from browsing an online shop to using a digital wallet at a checkout lane. The branding, the interface logic, and the user journey of the digital euro must be uniform across all environments. If a customer must learn one interaction method for online shopping and a completely different one at the store terminal, confusion will follow. This would ultimately lead to low adoption rates and increased operational-support costs on our side.

How critical are features such as offline payments and instant settlement for merchant trust and operational resilience?

Both features are foundational to merchant trust, though they serve different operational needs:

Offline functionality is paramount for operational resilience. If a network outage occurs, physical stores must remain capable of operating. However, while offline capability is technically important, an equally critical success factor is that the customer actually has the digital euro in their wallet and is accustomed to using it. High adoption and transaction frequency are essential. We expect it will take time until this reaches the broader population. For this to happen successfully, the digital euro must be incredibly easy to use and fully omnichannel-capable. A digital currency that can guarantee secure, risk-free offline transactions from device to terminal ensures that critical business continuity is protected under any circumstances, safeguarding the supply security for millions of citizens.

Instant settlement is a game-changer for cash-flow efficiency. In conventional card payments, funds can be tied up for days. Real-time settlement ensures that value is transferred immediately, mirroring the immediate utility of physical cash. This can have many positive effects for the European economy.

What lessons should policy-makers draw from previous payment innovations when it comes to merchant adoption?

The clearest lesson from the past is that adoption cannot be forced by regulation alone. It must be driven by economic incentives, and a new payment method will only succeed if all stakeholders are taken along on the journey. This means engaging the general population, the retail sector, associations, banks, and financial institutions from the very beginning. 

Furthermore, policy-makers must avoid fragmented rollouts. The digital euro needs a day-one “interoperability guarantee” across all member states.

Lastly, involving merchants early in the technical design phase – rather than presenting a finished product designed solely from a banking perspective – is vital to ensure that real-world retail workflows are respected.

If you could give one piece of advice to those responsible for designing the digital euro, what should they keep in mind for merchants?

Keep it simple, sovereign, and economically viable. Treat merchants as primary strategic partners, rather than just a mandatory acceptance network. Policy-makers must keep in mind that the digital euro stands in direct competition with other international payment methods regarding its functionalities and user-friendliness. Therefore, the system requires an agnostic architecture that is fully interoperable with other European initiatives, such as the EUDI Wallet. In general, the digital euro should be developed together with banks, payment service providers, and merchants. Further, ensure that the technical specifications rely on open market standards to allow private enterprise to innovate on top of the digital euro infrastructure. 

If you design a system with a fully European tech stack that is as fast as cash, but as convenient and secure as modern digital wallets, widespread merchant adoption will follow organically.

How do you see the landscape of payment methods evolving in the retail sector with the introduction of the digital euro over the next 5–10 years?

Over the next 5 to 10 years, we anticipate a consolidation of the payment landscape. Physical cash will likely continue its gradual decline, while instant, account-to-account digital payments will gain significant ground.

If the digital euro is successfully introduced by 2029, with the right incentives, it will likely establish itself as a dominant, highly trusted baseline payment method across Europe by the mid-2030s. We foresee a shift where physical cards lose market share to integrated smartphone wallets, where the digital euro coexists with retailer-owned loyalty payment systems – like Lidl Pay – and instant banking apps. This competition will ultimately benefit the entire ecosystem by driving down costs and fostering innovation across both digital marketplaces and physical storefronts.