The European Digital Payments Industry Alliance (EDPIA) believes that a well-designed digital euro has the potential to re-shape the retail payments market in a positive manner. If properly implemented, it could accelerate the digitalisation of payments and finance in Europe, while increasing competition across the financial sector.
In this paper, we provide a summary of EDPIA’s key views and recommendations on the digital euro proposal, which are as follows:
- As a matter of priority, the compensation model should be fair and balanced. Introducing strict pricing control mechanisms a priori would raise barriers to market entry, undermine service quality, and reduce incentives for acquirers to invest in new innovative products. EDPIA believes that the merchant service charge should not initially be subject to a cap so that competitive practices can emerge and initial investments are properly absorbed. Any cap introduced thereafter should be targeted and proportionate, addressing only concrete market anomalies.
- The rollout of the project should have a pragmatic roadmap which is ambitious enough to drive uptake but also be realistic in its targets to avoid missed deadlines that could erode trust.
- The scheme should be governed in an open, independent and balanced manner representing the interests of different actors and representatives of the sector, from payment firms, merchants, and consumer groups.