As per reports, 22 European banks will launch a payments system to rival Visa Inc. and MasterCard Inc. in the EU.
Moreover, EPI launched in July 2020 includes Europe’s largest banks like Deutsche Bank AG, ING Group NV, and UniCredit SpA.
Further, European Payments Initiative became an interim company in December 2020 with 22 banks as shareholders.
The banks are set to launch a pan-European payments system that they expect to be up and running by 2022.
It aims to address gaps in Europe’s “fragmented” payments landscape, where the public are often unable to make payments digitally.
However, around 50% of all retail transactions on the continent still take place in cash.
Europe is gradually witnessing trend towards cashless payment options amid the COVID-19 pandemic and lockdowns.
The plan is to facilitate direct regulation and build autonomy in core financial services.
This will help bring options to consumers and merchants to choose from in the future.
The European Central Bank has welcomed the initiative to take a step towards addressing fragmentation in European payments.
This is particularly in the realm of cross-border transactions. It is also a move to provide European economy with more sovereignty and more independence.
EPI has the potential to be successful but it won’t happen overnight according to market experts. This is as a result of EPI taking several years to get market penetration.
Moving forward, banks have time till December 2021 to ensure implementation of the new network over the following three years.
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