While competition is welcome, ESBG believes that innovation should be built on market-based terms.
Designing innovative payment solutions fully adapted to both consumers’ and corporates’ needs should
continuously take place; customers’ behaviour keeps changing due to new emerging technologies. In particular,
following the COVID-19 crisis, we believe that the demand for such solutions will increase.
Concerning instant payments, it is important that the industry continues to support the work done by
European market infrastructures such as the privately developed ones and the TIPS system of the ECB. Once
these infrastructures can ensure full interoperability and reachability, the industry can start building further
applications based on these infrastructures, especially on a pan-European level. This will assist in making instant
payments the ‘new normal’. Here it is especially relevant that the dialogue intensifies between policymakers,
infrastructure providers and the industry to reach the most optimal outcome. This should be based on a longterm sustainable business model that is attractive to all stakeholders. Adoption rates for instant payments
should be measured in terms of reachable accounts only, as that is the only relevant benchmark.
ESBG believes that customers are at the heart of the payments evolution: the focus of any payment-related
initiative or development should be a seamless customer experience that meets their needs and takes into
account instantaneousness, security, data protection, convenience and the existing diversity of payment
means. As the future of contactless payments relies on mobile banking and digital wallets, we advocate for
ensuring payment service providers a non-discriminatory access to vital components of mobile devices
(e.g. NFC or biometric identity readers) to foster the development of more innovative approaches. To that end,
ESBG welcomes the approach of the European Commission to critically investigate practices limiting access
to the NFC functionality on mobile devices. In addition, access to common technical platforms/ecosystems,
especially of the so-called Big Techs with a dominant position is required as well.
Whilst European banks have successfully developed and rolled out pan-European payment schemes for
regular credit transfers and direct debits, certain areas of the payments market remain fragmented. Cross-border
card payments in the internal market, for example, are only possible because of the solutions provided by a
few global, non-European market players. This creates a reliance on such players, which can become a risk
from an economic, political, operational and privacy perspective. We share the fears that dependence on
non-European global players creates a risk that the European payments market will not be fit to support our
Single Market and single currency, by making it more susceptible to external disruption such as cyber threats.
Accordingly, ESBG has welcomed the European Payment Initiative (EPI) as a promising step forward for
payments in Europe.
Digital currencies have the potential to substantially re-shape the future of banking and financial
intermediation. Central Bank Digital Currencies (CBDC), i.e. digital currencies issued by the public sector, are
thought to provide a significant boost in the retail use of digital assets. At the same time, however, new risks
and vulnerabilities may arise. Besides systemic risks concerns, ESBG considers especially worrying risks
that may jeopardise the commercial banking system, namely the erosion of retail deposit funding and
disintermediation of its core lending functions, as well as the increase of intractable loss of its payment
Over the past two years, the Commission and the ECB have repeatedly stressed that payments play a strategic role for the development of the European economy. Payments are considered an important factor for European sovereignty and are an important driver for strengthening the international role of the Euro. However, before compelling customer propositions can be developed, there is a need for certainty about a sustainable business model for instant payments, as the massive investments required need to be offset by a proper business case. Previous attempts to develop pan-European payment solutions – notably in the area of payment cards – failed due to the lack of policymaker support for a proper business model. Accordingly, policymakers should:
European policymakers are particularly keen on ensuring that future developments in the field of instant
payments lead to the emergence of EU-wide cross-border instant payment solution(s) in euros, due to fears
that foreign governments could hold leverage over the EU if global companies from non-European countries,
as service providers with global market power, will not necessarily act in the best interest of European
So far, the EU has welcomed new market-led initiatives aimed at providing pan-European payment solutions.
At the same time, aware of all the potential risks, the EU has curbed the development of private-led
frameworks aimed at issuing digital currencies (e.g. Libra Association).