Forget the restrictions of classic bank cards! Europe is preparing a universal solution for instant “account-to-account” payment on smartphones. A real revolution that will arrive in France from the end of 2023!
The payment duopoly of Visa and Mastercard raises competition concerns, as it gives them considerable power to dictate the prices and terms on which merchants and consumers can use their services – for example, the two companies charge high fees for using their payment processing services. This is why Europe is seeking to develop an alternative solution via the EPI company (European Payments Initiative). Launched in 2020, it is funded and powered by BFCM, BNP Paribas, BPCE, Crédit Agricole, Deutsche Bank, DSGV, ING, KBC, La Banque Postale, Société Générale, Nexi and Worldline, which have recently been joined by Belfius, DZ Bank , ABN Amro and Rabobank. All seek to establish “a unified instant account-to-account payment solution developed in Europe”as they explain in their press release. In other words, the PPE will offer a digital wallet solution – wallet in English – to allow users to pay via their smartphone by instant transfer, for all day-to-day uses, under a single brand at European level. Initially, the consortium wanted to develop their own European bank card, but numerous defections forced them to scale back their ambitions by refocusing on digital wallet and instant payment technology. And the French will be able to enjoy it from this year 2023!
EPI payment: a digital wallet with instant payment
The Paris Olympics are the perfect example of the problems caused by the duopoly of Visa and Mastercard. Indeed, as Visa is an official partner of the International Olympic Committee (IOC) until 2032, the company benefits from the exclusivity of the 2024 Olympic Games. Thus, all official stores will only accept bank cards from transmitter or cash. Mastercard and any foreign card such as American Express are refused. An aberration that scares away many customers! Also, the European solution will be launched as part of a pilot phase in France and Germany at the end of 2023, which will be joined in 2024 by Belgium. A choice justified by the fact that this zone represents more than half of non-cash retail payments in the euro zone, which makes it a very good base for development. The other European countries will be entitled to it later, without a more precise timetable.
Initially, the digital wallet will only support person-to-person (P2P) payment. Thus, users will be able to transfer money between them, from bank account to bank account, free of charge and in a few seconds, via the customer’s bank application or a dedicated application on a mobile phone, as the director explains. Deputy General Manager of BNP Paribas Thierry Laborde at BFM-TV. Then will gradually come person-to-business payments (P2Pro), then online purchases, and finally point-of-sale payments, via a QR code to be scanned for the latter. The ultimate goal is to cover all the use cases encountered on a daily basis. To use the PPE solution, you will need to be equipped with a smartphone. Several payment methods will be offered: single transactions, subscriptions, installment payments, cash on delivery and reservations
At the same time, the consortium is buying the Dutch Currence iDEAL, the dominant payment scheme in the Netherlands – in this way, EPI has a guarantee of success at least in this territory –, and the Luxembourg payment solution provider Payconiq International (PQI), which operates in the Netherlands, Belgium and Luxembourg, and which will continue to operate. In France, EPI intends to base its launch on the platform common to French banks Paylib, launched in 2013 on Android terminals and which did not meet with the expected success.