The EU plans a single system of direct payments

By | April 29, 2023

while in Europe the debate has started, as well as the initiatives to create a new single pan-European instrument direct paymentsto whose car the Interbank Systems member countries – as a defense against developments such as Apple pay and other related applications – the percentage of direct payments in the EU is still at a very low level.

As of today, the average number of instant payments in the EU is only 14% -there are markets with a percentage that exceeds 50%- and, as the gurus of instant payments reported yesterday at the Payments 360 event, organized by DIAS, is, as they are accustomed to say abroad, “a proportion too large to die, too small to live.”

14% of direct payments in the EU correspond to 3,000 million transactions a year and its main competitors are… credit cards, the Visa and Mastercard brands. With cards being another channel, Europe’s goal to further reduce cash requires enabling and increasing instant payments.

In Greece, the approach of direct payments is increasing, which are made through IRIS at no cost and in seconds, without the use of an iban, but only by calling the mobile number (from the app of each bank) in person . to Person (with 1.6 million users), but there is still a lot of room to increase transactional activity in e-commerce.

As much as banks do not push the business public to use direct interbank payments (for obvious reasons: fees), they risk, not only Greece, but all of Europe, losing customer share to US or Chinese competitors. such as China’s Alipay or Apple’s entry into the banking business through a partnership with Goldman.

In this direction, our country should perhaps increase the rate of use of direct payments, mainly in the electronic commerce sector, where participation through IRIS is marginally small, below 1%, as pointed out by the managing director of DIAS , Stavroula Kambouridoumoderating a related panel.

The top 2 in Europe: the Polish BLIK and the Spanish BIZUM

On the panel, the two main mobile instant payment forces in Europe (of the IRIS type), no less than the Polish BLIK and Spanish BIZUM. As the CEO of BLIK pointed out, dario mazurkiewicz, in Poland today 67% of e-commerce transactions are carried out through BLIK and the ambition of the company, which started only in 2015 as a small fintech, is, in addition to the majority of Poles, to win equally to the French, the Germans and other European citizens, has already announced the extension of its solution to Romania and Slovakia. In Spain, the percentage of use of Bizum in electronic commerce this year will reach 25%.

Which means that BLIK (or Bizum) could potentially target Greece as well, attracting the country’s business public and banking customers and becoming an “aggressive” competitor for the banks themselves, if the Greek IRIS doesn’t multiply the frequency and amount of their direct transactions. . Something that is partly the responsibility of the banks themselves, which should invest more in their promotion.

The “threat” of BLİK, like of course any other European, Asian and American fintech or bigtech (Apple type), lies in the fact that the strategy of these players is to increase their income through acquisitions, partnerships and expansions outside of the borders. Both BLIK and the Spanish BIZUM have great support from their shareholders (commercial banks) whose CEOs consider these products as their children, and have been involved from day one in the strategic decisions of the product.

As Blik’s CEO mentioned, merchants prefer his solution because it charges them smaller fees compared to cards and the money is directly in their accounts.

It seems crazy, but it is not, as was pointed out by everyone present at the Payments 360 session yesterday, as well as by the BIZUM business development manager, Fernando Rodríguez Ferrer, underlining the need to invest in direct payment systems, both at country and European level. level.

The creation of a single pan-European means of direct payments

Meanwhile, the idea of ​​creating a single European instant payment wallet, which is promoted by PAI (European Payments Initiative). Talking about the topic or etienne gusformerly director of the European Payments Council together with the director of innovation of the ECB, holger neuhausand the president of EMPSA, the European Association of Mobile Payment Systems, dr. Christian Pirknerdescribed the need for a single pan-European interbank direct payment instrument, as a shield and defense against similar successful initiatives from Asia and the US.

It should be noted that just a few days ago EPI, after welcoming the entry of four new shareholders (in total reaching 18 shareholders, banks and payment companies), announced two more acquisitions of domestic payment systems: the IDEALwhich is an original Danish payment scheme, and the PQIcorresponding proposal from Belgium and Luxembourg.

In a nutshell, EPI was founded and is targeting the payment systems industry in Europe and is made up of leading forces. Its objective is to allow European banks to join forces and improve their position in the world ranking of innovative companies in payment systems. Working for the benefit of the consumer and the trader, within the framework of the policy of the EU and the ECB.

Much remains to be done at the European level, firstly establishing standards and promoting direct payments at higher rates, and in Greece even more, to offer a commonly accepted alternative means of payment for merchants who seem to be asking for it.

Follow on Google News for immediate and valid financial information!

Leave a Reply

Your email address will not be published. Required fields are marked *