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The problem has been known for a long time: Europe depends on non-European payment solutions for “digital payment transactions in the retail sector”. The market is dominated by US credit card giants like Visa and Mastercard. Internet giants like Apple and Google are also entering the market with new payment solutions. The result: with every card transaction that is processed through a non-European provider, significant added value migrates from the European Economic Area.
PF19: Payment-Festival
How can the European business location achieve its sovereignty in the payments sector in the context of increasing digitization? This issue will be investigated tomorrow, Tuesday, as part of the Payment Festival initiated by the PF19 platform.
PF19 was founded in 2019 by initiators Martin Sprensgseis, Gerald Gruber, Max Juerschik and Birgit Kraft-Kinz, with the aim of creating a platform of networks across Europe for collaboration and Innovation to settle in payment. Around 500 key people are currently participating in PF19. These include banks and financial institutions, payments sector service providers, commercial companies, startups and fintechs, as well as regulators and interest groups. The platform is expected to grow to a total of 2,800 people in the coming years.
PF19 deals with the European payments strategy
In the run-up to the Payment Festival, the current issues were explained at a press conference on Monday, which will be discussed by top-tier industry experts during the festival. These include Holger Neuhaus, Head of the ECB’s Payment and Market Infrastructure Division, Christian Pirkner, founder of Bluecode, and Stefan Augustin, Head of the Department of Equities, Payment Transactions and Internal Services at the National Bank of Austria. (OeNB).
The main focus of the festival is the so-called “European Retail Payment Strategy”. The strategy was formulated by the European Commission and aims, among other things, to strengthen instant and digital payment solutions across Europe. “Our pillars are competition and harmonization for greater efficiency. But the financial and monetary sovereignty of Europe is also a key concern for us, ”Neuhaus said.
Regional solution interoperability
As Christian Pirkner explained in the run-up to the Payment Festival, there are still numerous challenges to overcome regarding the interoperability of regional payment solutions. Pirkner referred to the work of the European Mobile Payment Systems Association (EMPSA), which aims to promote the use throughout Europe of different mobile payment systems, including Bluecode. In this context, Pirkner made a comparison with roaming throughout the EU, which has already established itself in the European telecommunications industry.
The future is in account-to-account transfers
Stefan Augustin from OeNB gave an idea of how Austria is currently positioned in the payments sector. According to Augustin, five billion euros were generated in Austria in consumer transactions in 2020; of these, three billion euros in cash, one billion by card payment and one billion by transfer from account to account. In Austria, there are still more consumer transactions for cash payments than for digital payment transactions. However, according to their assessment, by 2025 digital payment options should replace cash as the main payment option.
Augustin sees great potential for European solutions in account-to-account transactions, the so-called “real-time automatic payments”. These would not only reduce transaction costs for retailers, but also increase the convenience factor for customers. “Payment transactions are changing from a back-end to a front-end solution. Now it is important to take advantage of the opportunities offered by real-time payments if the bank does not want to be left behind in the competition with alternative payment service providers, ”Augustin concluded.
