Digitalisation has indisputably come a long way in reshaping the European retail payments landscape. So it is natural for digitalisation to be one of the starting points of our retail payments strategy
Thank you for inviting me to speak at this
fourteenth edition of the Payments Forum organised by Suomen Pankki –
Finlands Bank. Finland is often seen as a forerunner in the development
of retail payments, certainly when it comes to digitalisation and its
effects. And I am pleased that despite the ongoing pandemic, we have
come together as stakeholders of the payments ecosystem.
Today, I would like to discuss how we can promote digital, European,
instant retail payment solutions that can be used by everyone,
everywhere.
Digital
Digitalisation has indisputably come a long way in reshaping the European retail payments landscape. So it is natural for digitalisation to be one of the starting points of our retail payments strategy.
Simply put, digitalisation is changing the way we pay. We are
increasingly paying online and with cards. The pandemic has further
accelerated this trend.
In facing these developments, Europe is not optimally positioned,
not least because of the “wait-and-see” attitude that has in some cases
prevailed in the past. This has made Europe overly dependent on a few
foreign providers for card and online payments, resulting in a high
degree of market concentration.
European
To increase choice, resilience and
competitiveness, the European payments ecosystem must proactively
stimulate competition, including by developing innovative, Europe-grown
payment solutions and technologies.
For this reason, a key priority of our retail payments strategy is
the development of a European payment solution for the point of
interaction. The ECB welcomed the launch of the European Payments Initiative
as its objectives meet our public interest criteria: pan-European reach
and customer experience, convenience and cost efficiency, safety and
efficiency, European brand and governance, and global acceptance as a
longer-term goal. We remain open to other market initiatives, provided
they meet these requirements.
Instant
Another key priority of our retail payments strategy is the full
deployment of instant payments. Here, too, the industry has a decisive
role to play, facilitated or guided by the authorities.
On the operational side, the Eurosystem has taken steps to ensure
the pan-European reach of instant payments by the end of 2021 through
our TARGET instant payments settlement service (TIPS). But we know that the private sector, by contrast, has made far less progress on this front.
The next step is for payment service providers to offer instant
payments at attractive and transparent conditions. This means that
prices should be neither excessive nor hidden to consumers. While the
cost for service providers of using TIPS is 0.20 eurocent (€0.002) per
instant payment transaction, instant payments are sometimes offered to
consumers for €1 per transaction. This must change. For instant payments
to become the new normal, they must be cheap and easy to use. We would
also like to see providers make instant payments available on all
commonly used electronic channels and offer much-desired functionalities
such as Request-to-Pay.
For everyone, everywhere
Our strategy goes further. Payments that cross the EU border must
become cheaper, easier and faster. We thus contribute to the
international work on cross-border payments, and we are exploring with
Sveriges Riksbank how TIPS could support cross-currency instant payment
transactions.
To promote innovation and digitalisation, we are also investigating
the opportunities of pan-European electronic identities and electronic
signatures for retail payments. Finally, the strategy encompasses work
on the environmental sustainability of payments and on access to
payments for all citizens.
We are also preparing for the future through our work on a possible
digital euro. A digital euro would provide Europeans cost-free access to
a safe form of digital money which respects privacy and has legal
tender status, ensuring it can be used everywhere.
Work is ongoing in cooperation between the ECB and the national central banks, including Suomen Pankii – Finlands Bank.
Let me conclude.
The Eurosystem and the European Commission have outlined a clear vision of the future of retail payments in Europe. Digital, European, instant, for everyone, everywhere. Together, we can make it happen.
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