European Payments Initiative (EPI) took a major step forward on 25 April by announcing the launch of a unified solution for instant account-to-account payments. In other words, a digital wallet.
This was a major step forward, but it is not as far-reaching as the initial 2020 project, which was to create a payment system and a European interbank network based on the Sepa Credit Transfer scheme to replace national systems and compete with the two global payment giants, Visa and Mastercard, which handle the majority of cross-border payments in Europe. Visa and Mastercard can suspend their activity in Europe at any time if the American authorities so request. Donald Trump made this threat against France a few years ago.
However, this goal was abandoned in March 2022, following the withdrawal of German banks from the project, which forced EPI to concentrate on developing a digital wallet and a solution based on instant payments.
And in account-to-account payment technology, only the Netherlands has a solution that is really in use. This explains EPI’s acquisition of its main promoter, the Dutch company Currence Ideal, and of Payconiq International, a Luxembourg-based payment solutions provider with a strong presence in the Netherlands.
In 2022, Payconiq withdrew its application from the Dutch market to become a technology provider for the Dutch company.
Guido Vermeent, Payconiq’s CEO, said in an interview that EPI’s acquisition is a form of recognition.
Vermeent stated: “It is a recognition of the work we have done and validates the objectives we have set ourselves over the past few years. Namely the search for European expansion, which started for us in 2017 with the acquisition of Digicash. With Digicash, we were able to provide a stable, clear and sustainable payment solution that has become a reference for the Luxembourg population. And we have also been able to develop an innovative service offering. Working with EPI will allow us to expand this offering and innovate to create the payment landscape we want.”
Payconiq brand to remain in Luxembourg
Will Payconiq eventually merge into EPI?
“For now, we will continue to operate as we did before the purchase,” he said. “The brand will be retained and we will continue to provide and develop services to banks, merchants and individuals.” Vermeent said he believes that EPI’s strategy is to “cooperate with as many European payment systems and solutions as possible in order to unify them into a truly European system.” This would be the first step towards a potential return to the original objectives. Vermeent neither confirmed nor excluded this.
To establish its offer as a benchmark, EPI wants to develop services in addition to simple transactions.
Those would be “services that are truly unique in Europe in the payments landscape and that will not be a copy and paste of what already exists. We want to launch highly differentiated services. EPI is working in this direction and has a roadmap. Without going into the details of these services... a first salvo will be launched by the end of the year.” Fractional payment is most often mentioned by commentators as a potential service, as is, in the longer term, the management of the digital euro.
These services will not compete with those of the banks, he said. “In payment services, we see the banks as partners. The aim is really to create a continent-wide network.” An example of collaboration is the fact that EPI’s digital wallet will be based on the 30m subscribers to BNP Paribas’ “Paylib entre amis” service.
In addition to these two acquisitions, EPI announced the arrival of four new shareholders: Belfius, DZ Bank, ABN Amro and Rabobank. They join BFCM, BNP Paribas, BPCE, Crédit Agricole, Deutsche Bank, DSGV, ING, KBC, La Banque Postale, Nexi, Société Générale and Worldline.
No Luxembourg bank is yet involved in the project. Vermeent commented: “We are in contact with them, but it is up to them to decide how they want to cooperate with the EPI initiative.”
This article was published for the Delano Finance newsletter, the weekly source for financial news in Luxembourg. Subscribe using this link. Read this article in French on the Paperjam site.