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How the EPI can help to deliver Europe’s digital goals

New Technology
6 Mins.

The European Payments Initiative continues to gain momentum. As well as making payments easier for consumers across Europe, it could help to meet the EU’s goal to digitalize businesses and create a Europe-based digital infrastructure

The European Commission President’s desire to make the 2020s Europe’s Digital Decade now has some concrete targets. In March, Ursula von der Leyen unveiled four broad goals, including gigabit connectivity and e-medical records for all citizens; 75% of companies to be using cloud computing, big data, and AI; and online availability of all key public services.1

“The EU’s ambition is to be digitally sovereign in an open and interconnected world, and to pursue digital policies that empower people and businesses to seize a human-centered, sustainable, and more prosperous digital future,” the Commission noted.

The notion of digital sovereignty comes from the EU’s belief that Europe needs to regain autonomy of its data and security, and forge more of a strategic leadership role in a world that is becoming increasingly polarized. It is also a formal recognition that Europe does not have a tech company or digital infrastructure that can rival the size and scale of those in the US or China.2

The importance of multi-stakeholder projects

As always with the EU, getting 27 nations to agree on a path forward is key to achieving its goals. To make its digital ambitions happen, the bloc has put multi-country and multi-stakeholder projects at the core of the Digital Decade plan. One of the most recent examples is GAIA-X, which aims to build “a federated, open data infrastructure based on European values” by enabling cloud providers to scale and develop new use cases in areas such as agriculture, energy, finance, and healthcare.3

“European consumers and businesses wish to be able to trust the digital technologies around them, amid growing concerns regarding data protection, cybersecurity, and resilience“
Ralf Wintergerst
G+D Group CEO

Pan-European initiatives are also gaining momentum in the payments space. The European Payments Initiative, for example, aims to offer consumers and businesses a payment card, digital wallet, and associated infrastructure that can be used anywhere from Dublin to Athens. The digital euro, meanwhile, is a parallel European Central Bank project that aims to offer a digital version of the bloc’s physical currency.

“European consumers and businesses wish to be able to trust the digital technologies around them, amid growing concerns regarding data protection, cybersecurity, and resilience. That is why G+D supports initiatives aiming at strengthening the digital sovereignty of Europe, such as the EPI and the digital euro,” says Ralf Wintergerst, G+D Group CEO.

A future-focused payment system for Europe

The EPI is looking to replace the existing, fragmented retail payments landscape in Europe – which consists of national payment schemes in some countries and dependence on global payment schemes in others – with a unified, end-to-end European ecosystem that would leverage the existing commercial banking network and acceptance infrastucture. Based on the SEPA Instant Credit Transfer scheme, which enables fast settlement, it would serve all major retail use cases, from cash withdrawals to in-store and peer-to-peer (P2P) payments. The EPI would therefore provide long-overdue competition to non-European rivals, such as Mastercard and Visa, that currently dominate the payments space.

Payment with credit card, digital wallet and smart watch for buying coffee and macaroons

Similarly, the recently announced digital euro initiative offers an innovative, European addition to the payment ecosystem. As a central bank digital currency, it would be an electronic form of cash enabling fast and secure digital payments based on public money. The ECB is currently assessing the possible launch of a digital euro to complement existing cash and private-sector-based digital payment options. According to a recent public consultation it held, privacy and security are the criteria respondents desire most from a digital currency.4

The EPI’s founding shareholders – a coalition of 31 European financial institutions and two specialist payment companies that publicy announced their plans in July 2020 – are working on a road map that will enable them to launch in the near future. European payment technology company G+D and payment software business Netcetera have joined forces to contribute to the EPI by delivering their payment technology expertise.

“While appreciating the innovation track record of large global players, we understand the wish for strengthening Europe’s sovereignty over retail payments. Knowing ‘best practice’ from several regions around the world enables us to support the implementation of the EPI together with our strategic partner Netcetera, and potentially in collaboration with further companies,” says Gabrielle Bugat, Member of the Group Management Team at G+D, leading the smart cards and digital payments business.

Experience meets expertise

Specifically, G+D and Netcetera plan to combine existing off-the-shelf payment technologies and enhance them for the EPI’s bespoke specifications. The two European companies have extensive expertise that will help them to deliver such a solution – they have carried out around 4,000 custom software developments and integrations at financial companies around the globe, including mobile banking platforms and national digital payment ecosystems, and have managed closed-loop payment schemes for retailers.

“Payment ecosystems such as the EPI are not greenfield. To deliver a rapid go-to-market strategy, you need to leverage existing products and combine them with bespoke development for consumers, merchants, and banks across Europe. This is what we bring to the partnership with G+D for the EPI,” says Andrej Vckovski, Co-founder and CEO of Netcetera.

As Europe continues to work towards its digital sovereignty goals, the EPI could play a significant role in helping Europe provide an innovative, secure, and truly European payments infrastructure that would benefit consumers, merchants, and commercial banks.

  1. “Europe’s Digital Decade: Commission sets the course towards a digitally empowered Europe by 2030,” ec.europa.eu, 2021

  2. “Digital sovereignty for Europe,” europarl.europa.eu, 2020

  3. GAIA-X: A Federated Data Infrastructure for Europe,” data-infrastructure.eu, 2021

  4. “ECB publishes the results of the public consultation on a digital euro,” ecb.europa.eu, 2021

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