INFRASTRUCTURE: EUROPEAN PAYMENTS INITIATIVE
Martina Weimert, CEO of the European Payments Initiative Interim Company, and Craig Ramsey, Head of Real-Time Payments at ACI Worldwide, on why this time the EU’s dream of instant integration could just become reality The idea of unifying European payments is hardly new. There have been several ambitious initiatives over the years, including the short-lived Jean Monnet Project (2008-2011), while the Single Euro Payments Area (SEPA), established in 2008 and now spanning 36 countries, is very much alive. It only partially realised the harmony it set out to achieve, though, particularly in the area of card payments and now a new, industry-led contender is determined to finish the job. The European Payments initiative (EPI) is the latest effort to build a pan-continental system for cross-border payments in the region. There are, however, some notable differences to what has gone before. It is the first to address all types of retail transactions, including card and instant payments, peer-to-peer (P2P) transactions and digital wallets, in physical and online environments. And it’s upfront about taking on the hegemony of American operators Visa and Mastercard. While that was also the European Central Bank’s
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(ECB’s) aspiration for a still-not-realised ‘SEPA card’, the EPI will instead attempt to cover an important part of European card volumes by leveraging the ECB’s TARGET Instant Payment Settlement (TIPS) for transactions via smartphones, PCs and in-store point-of-sale. Europe’s seven local schemes account for around half of domestic payments using cards, but where the US operators dominate is in transactions across borders in the EU. While the EPI has no direct contact with the schemes, it does onboard banks and acquirers who can be shareholders in them. The EPI also sets out to address the rising influence on European payments of Asia’s super-app financial platforms WeChat Pay and Alipay, as well as any other, non-EU super-apps yet to emerge. So, with more than 30 banks and seven countries so far on board, and just a few months from launch, will the EPI align the payment planets this time? The political prospects for success seem good, but it’s still a big step to unite Europe’s fragmented payment systems and ensure
ongoing cooperation among the EPI’s stakeholders – banks, credit institutions and other payment interests. As CEO of the EPI Interim Company, Martina Weimert is driving the new solution, and she believes it’s learned from past European payments projects’ successes and their mis-steps. “The idea is to create a fully-fledged European ecosystem, on both the issuing and the acquiring sides,” she says. “We know that if you just serve one side, you’ll never be successful. We’ll involve other players and build up our technology platform so that we can offer connectivity to all these players.” Real-time connectivity and Interoperability are key challenges for payments, which is something Craig Ramsey knows all about from heading real-time payments at ACI Worldwide, a specialist software provider offering end-to-end payment processing solutions. Supporting many of the world’s payment systems, ACI takes an independent view. Having watched many of them evolve across the world, though, Ramsey sees the www.fintechf.com