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Mobile wallet solutions weighed up how the EU’s digital euro could interact with their products at the Merchant Payment Ecosystem (MPE) in Berlin last week.
A European mobile wallet solution would be, as one MPE attendee put it, “the European dream” for policymakers.
The European Commission and the European Central Bank (ECB) have long desired a shift away from the dominance of US and Chinese payment solutions in Europe, and instead to see more fruitful collaborations among EU players.
However, so far, this has failed to materialise quickly.
There are national success stories, such as Bizum in Spain, Blik in Poland and iDEAL in the Netherlands.
The latter is now being acquired by a regional solution, the European Payment Initiative (EPI), which hopes to launch its Wero mobile wallet in the near future.
There is also Vipps MobilePay, a merger of Vipps and MobilePay, which is present in Denmark, Finland, Norway and Lithuania.
Yet, after the EPI had a slow and at times poor start, the European Commission and the ECB appeared to pivot elsewhere and, suddenly, it seemed that they were banking on the digital euro project filling the void, which key players touched upon during the MPE's "Exploring the future of mobile payments" session.
“From the EPI side, we would love to integrate it and provide choice to customers to either pay with a bank account or with a digital euro,” said Fabien Mansfield, executive management director at the EPI.
Sirpa Nordlund, retail chief at Vipps MobilePay, echoed this positive sentiment.
“This is an enabler and a potential payment rail,” said Nordlund.
However, panellists acknowledged that the future possibilities for the digital euro and its mobile solutions depend on the final text of the EU’s legislation.
“It will depend whether different interfaces can be built by mobile payment solutions or whether this is pushed as a separate digital euro app,” said Magdalena Kubisa, business development director at Blik.
That, according to Mansfield, would be an interesting discussion, with him suggesting that “this would go against European competition law”.
“Today, I would say that the digital euro is not a competitor,” said Kubisa.
Kubisa pointed out that the first target banks for the digital euro are within the eurozone, whereas Poland still uses the złoty.
“It would take some time before we are able to operate in the same markets,” she said.
Kubisa continued that when it comes to payment types such as peer-to-peer, she wants to see cooperation in the European market.
“We need to cooperate to make sure there is interoperability, and that you can send money from one customer to another with EPI,” she suggested.
The need for interoperability and collaboration was outlined by fellow panellist Steven Jacob of Arkwright Consulting. “Having a preference for European solutions in order to drive competition, I would really love it if you all joined forces and do something together.”
Although Jacob acknowledged that on the technology level this is challenging, “on a political level, collaboration can be feasible”.
“You guys are fighting an uphill battle, because of the international wallets. At the moment, we don’t really have competition because as ecosystem-based solutions, they have a certain advantage.”
Speaking to Vixio after the panel, Jacob said for a European payment solution to succeed, “it's imperative that it delivers tangible customer value to users and merchants, secures sustainable political backing, and presents a business case with investment security for banks.”
Meanwhile, Atze Faas, an audience member, said that merchants would love to see more collaboration or convergence between European mobile payment solutions.
“Otherwise, the international card schemes will win. It’s already an uphill battle due to the established position of Apple and Google Pay,” he told Vixio. “There are so many solutions at the moment trying to do the same thing. We are all for competition but for that you need mass, not fragmentation, in the European market."
"Hard decisions need to be made to ensure that Europe has a competitive payments solution,” Faas warned. “You can be very exposed by having a reliance on non-EU companies."
