EU banks contemplate rival to card schemes and Big Tech

EU banks contemplate rival to card schemes and Big Tech

Twenty European banks are reportedly working on the development of a rival payment system to challenge the dominance of Visa and Mastercard and the threat from Chinese and US Big Tech firms, according to a report by AFP.

The Pan European Payment System Initiative (Pepsi) would handle all forms of cashless transactions, sources told the newswire.

Carlo Bovero, global cards and retail payments manager at BNP Paribas, alluded to the plans during a conference organised by the banking magazine Revue Banque in Paris.

Bovero said banks "representing a big part of Europe" were involved in the discussions.

Several sources told AFP that the participants included most French banks as well as Germany's Deutsche Bank.

In April, a senior executive at Deutsche Bundesbank called on the banking sector to develop a pan-European mobile payments platform capable of competing with systems from Big Tech giants from the US and China.

Similar noises have emerged from the European Central Bank in the payment cards market, which is dominated by US schemes Mastercard and Visa. The ECB has long-floated the idea of a home-grown cross-border scheme capable of taking on the big brands, but so far without success.

Comments: (5)

A Finextra member
A Finextra member 12 November, 2019, 12:07Be the first to give this comment the thumbs up 0 likes

Hurrah!  Merchants have been craving for an alternative to the current major card schemes. The big question is will merchants be engaged in this new initiative and why would shoppers give up their exiting cards in preference?

Steven Hatton
Steven Hatton - Trusek Ltd - Amersham 12 November, 2019, 12:23Be the first to give this comment the thumbs up 0 likes

Hopefully not another project that gets bogged down under the weight of committees, consultations published papers etc. The technology exists to enable them to just get on with it.

Gerard Hergenroeder
Gerard Hergenroeder - Payments Shark - Millersvile 12 November, 2019, 13:521 like 1 like

The key issue that this group will have to address to quid pro quo between merchants, merchant banks and cardholder banks. Tradionally, the quid pro quo has been between merchant and cardholder banks. Making merchants a part of the formula could be game changer.

Philip Andreae
Philip Andreae - PA&A - Sea Island, Ga 12 November, 2019, 21:391 like 1 like

How many times before have the European banks tried.  They once had a Payment company called Eurocard and another called Eurocheque.  They sold the merged company Europay to MasterCard.  They then created Visa Europe and sold it back to Visa International.

Independence in a GLobal world is a great idea.  As long as the European Banks have Global ambitions.

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 13 November, 2019, 08:06Be the first to give this comment the thumbs up 0 likes

This will happen via a FInTech, thanks to PSD2 and Open Banking....Just a few tweeks to the friction points and it will happen....