Messsage from the CEO, Nina Schindler
The European payments landscape has undergone significant transformation in the past decade sparked by a mix of shifting customer preferences, the creation of SEPA instruments by European banks and other payment service providers in the context of the European Payments Council, growing competition, innovation and technological advancements.
In this dynamic landscape, both the European Commission and the ECB have formulated their respective retail payment strategies. What these have in common is that they regret the lack of a pan-European solution for payments and express the wish for home grown European payment solutions to develop.
In this context, the European Payments Initiative (EPI) stands as a beacon of innovation with the mission to create a meaningful payment alternative that is widely embraced by Europe. Initiated in 2020 and supported by several cooperative banks, EPI was conceived to support the strengthening of the Single Market and the European digital agenda and to stimulate the growth of a unified Europe by continuously innovating in payments.
With the recent announcement of the commercial brand name of its digital wallet solution, it is a good moment to zoom in on where the EPI initiative stands and when we can expect its first deliverables to come to market. Let’s hear what Martina Weimert, CEO of EPI company can tell us about this and how Eric Ducoulombier, Head of Unit at the European Commission, looks at it.
3 Questions to Ms Martina WEIMERT, Chief Executive Officer, EPI Company
Ms Martina Weimert has been appointed CEO of EPI Company in December 2020. With 20 years of experience in international consulting, she has in-depth knowledge in payments and payment solution set-up, fintech, blockchain and retail banking in Europe, the Americas and the Middle East. Prior to joining EPI, she was leading as a partner the European payments practice of the consultancy Oliver Wyman, previously holding the position of Senior VP at Capgemini Consulting.
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- The European Payments Initiative (EPI) is an important payment initiative backed by 16 shareholders with big ambitions for Europe. Could you remind us why EPI was created, what the project is about, and provide an overview of the major milestones already achieved/on the horizon?
EPI was created to enable a more unified, efficient, and innovative payments landscape across Europe. Initiated in 2020, it aims at establishing a pan-European payment solution that will enhance convenience and competition. It also serves as a foundation for the fulfilment of the EC and ECB’s pan-European retail payments strategy asking for a European instant payment solution, and to promote payment innovation in Europe. Our objective is to offer a digital payment method that can be used by individuals and businesses ultimately throughout Europe, irrespective of their location, making it an attractive alternative to cash and other dominant players.
Since its inception, EPI has achieved notable milestones. In 2021, we aligned shareholding banks and acquirers, secured the financing, and initiated the detailed design process of the payment solution. In 2022, we have started the rulebook elaboration, and the technical and functional set-up of our payment’s platform based on SCT Inst with a focus on a digital wallet. We have also contributed to the prototyping exercise for a digital euro conducted by the ECB. In 2023, we have completed the EPI Rulebook, the set of rules upon which our payment solution will function. We are nowadays in the process of closing two strategic acquisitions - of the Dutch payment solution iDEAL and the Luxembourgish technology provider Payconiq International.
Looking ahead, EPI has several significant milestones on the horizon. Within the next months, we aim to finalise the technical development of the first use case (P2P) to be launched in June 2024 and we have initiated the development of e/m-commerce use cases. Additionally, efforts will be focused on expanding the participant member base, engaging with European banks, merchants, and other stakeholders to ensure broad acceptance.
Overall, EPI aims at providing value for consumers and merchants, promoting competition, and maximising the benefits of digital payments across Europe. We want to allow banks and acquirers to have an important role in these payments.
- EPI recently announced the commercial name for its ground-breaking digital wallet solution, Wero. Can you explain its rationale and when the digital wallet solution is expected to reach the market?
EPI has just announced the selection of “wero” as the commercial name for its digital wallet solution, while the acronym EPI will continue to exist as the corporate name (“wero by epi”). Choosing the name was a meticulous process involving extensive research in a large range of European countries, and feedback from consumers. We felt that in a market filled with predictable “pay’” brand names, "wero" stood out from a list of 238 candidate names we considered since it combines different elements which we stand for: the collective European character of the “we” and a pronunciation close to the word “Euro”. Finally, wero is close to “vero” meaning “true” in some Latin-based languages. As announced, I personally found it catchy with its simple yet memorable structure, and the short sound resonates with the fast-paced nature of digital transactions.
Currently, we are actively working towards launching “wero” by mid-2024 in Belgium, France, and Germany, followed by the Netherlands, and we aim to extend to other countries in the years to come. Wero will be available through EPI’s member banks’ applications and as a mobile application on both Android and iOS platforms. It is important to understand that with “wero” the client-relationship will always remain with the banks and the acquirers.
In a nutshell, “wero” is set to redefine the way people living in Europe pay and would like to get paid including all kind of commercial payments, by leveraging an account-to-account infrastructure, enabling faster payment flows with a wide range of value-added services. Through this new digital wallet, consumers will have access to a comprehensive range of features and value-added services, such as secure and fast payments, person-to-person (P2P) transactions, online and in-shop shopping capabilities, merchant loyalty programs, etc. We envision wero to become the preferred digital wallet in Europe, bridging the existing gaps in the current payment ecosystem.
- How should we see the EPI initiative in the context of the Digital Euro project of the ECB and the related legislative proposal put forward by the European Commission on 28 June 2023?
EPI should be seen as a private-sector initiative that seeks to establish a competitive and attractive pan-European payment solution, offered by banks and acquirers enabling seamless cross-border transactions. The digital euro project purpose is to create a central bank digital currency that will be accessible to all citizens and businesses in the Eurozone. This initiative primarily focuses on the role of the ECB in issuing and managing a digital currency and offering these for payments.
While both initiatives share the common goal of leveraging digital technology to modernise payments, they differ in their approach and focus. The digital euro project is led by the ECB and has a central-bank-centric approach, ensuring trust and stability within the financial system. EPI, on the other hand, is a private initiative working with banks and payment service providers to meet the evolving needs of consumers and to increase Europe’s competitiveness in payments.
It is important to note that EPI and the digital euro project are not mutually exclusive. They can coexist and potentially complement each other, as the digital euro could be used through the “wero”. Additionally, collaboration between the public and private sector can foster innovation and improve the overall digital payment ecosystem within Europe.
Therefore, considering EPI in the context of the digital euro project and the related legislative proposals means recognising both initiatives' potential to contribute to the modernisation and efficiency of digital payments in Europe, while respecting their respective roles and objectives.
Second Opinion from Mr Eric DUCOULOMBIER, Head of Unit, DG for Financial Stability, Financial Services and Capital Markets Union, Retail Financial Services Unit, European Commission
Mr Eric Ducoulombier is, since 1 January 2019, Head of the Retail and Payments Unit in the European Commission (DG FISMA). Prior to that he was Head of the Unit dealing with Inter-Institutional affairs and Planning in DG FISMA. Eric joined the European Commission in 1992, after having worked a few years in the private sector. He holds a Master Degree in Law from the University of Lille (France).
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The European Commission has, since the very beginning, followed with utmost interest the EPI project. This project corresponds to the Commission’s vision for retail payments as laid down in our 2020 Retail Payments Strategy for the EU. One of the key elements of our vision was indeed that “Competitive home-grown and pan-European payment solutions are available, supporting Europe’s economic and financial sovereignty.” The project has now clearly reached its cruise speed, confirmed by the recent strategic acquisitions recalled by Martina. The Commission is convinced that EPI has a huge potential in terms of innovation, competition and open strategic autonomy. The announcement by EPI of the launch of its ‘wero’ digital wallet in 2024 is definitely excellent news for the European payments landscape.
EPI is a long-awaited initiative, coming after a series of unsuccessful attempts to design pan-European payments instruments. It possesses in my view all the necessary ingredients to be successful: a solid and stable shareholder base; a clear, coherent and ambitious vision and a political environment where the private and public worlds are fully aligned - which might not always have been the case in the past. It will also benefit from our policy and regulatory efforts. In the past 4 years the European Commission has been working relentlessly to offer to all payments stakeholders, including obviously EPI, a safe, dynamic and competitive European retail payment market based on a stable and innovation-friendly legal framework. In particular, our proposals to accelerate the take-up of instant payments (2022) and to modernise the payments legal framework (2023) aim at fostering a market where innovative companies can flourish and offer state-of-the-art payment instruments to their customers. EPI should largely benefit from this legal framework, in particular from our legal initiative on instant payments which is about to be adopted by the co-legislators. I also fully subscribe to what Martina wrote above about the fact that “EPI and the digital euro project are not mutually exclusive.” They can indeed -and I am convinced that they will- coexist and potentially complement each other. The last thing that we want is to have a digital euro that would crowd out private payment solutions. Our proposed legal framework for a digital euro has been designed with this key concern in mind.
I am very optimistic about the future of EPI. And I am impatient to see, by June of next year, the concrete manifestation of its years of efforts. I trust that ‘wero’ will only be the beginning of a range of future EPI-branded payment instruments. I also trust that this launch will incentivise other stakeholders to join the project, further broadening its geographical base and giving it an even larger European identity. Europe has for decades been at the forefront of innovation in payments. We also have world-class companies that facilitate the payment process. But for some unfortunate reasons, and despite the existence of the single market and the single currency, Europe still does not have pan-European brands as regards means of payments. I am sure that EPI will remedy this anomaly. I wish them good luck with the future milestones presented by Martina.