The European Payments Initiative (EPI) is in the news for three reasons: first launch of a pilot phase offer, a double acquisition and the addition of four new shareholders.
At the time of its creation in July 2020, EPI had a clear ambition: offer a digital account-to-account payment solution that can be used anywhere in Europe, based on instant transfer technology.
Set up by 31 major players from across the Eurozone in 2020, the EPI was set up to create a pan-European payments initiative that could handle both corporate and consumer payments via card and instant payment rails.
Its aims – to reduce the cost and time taken of payments to consumers, merchants and participating banks – were of course laudable.
Yet its insistence on a set of “European needs” – whatever they are – sounded somewhat dirigiste and vague. And so the subsequent history of the initiative has proven.
Of the initial 31 partners, just 13 are pressing ahead with the commitment to a shared instant payment scheme as of 11 March 2022.
That figure itself is down from a mere 18 out of 31 (33 including two partners joining after inception) who initially committed to the instant payment scheme. Meanwhile, the plan for a distinct European card network has been scrapped.
Today, however, it seems that the phoenix may be rising.
Two acquisitions to strengthen EPI
With the acquisition of Currence iDEAL, a leading payment scheme in the Netherlands, and Payconiq International, the Luxembourg-based payment solutions provider, EPI will be able to leverage the expertise of major players in their markets to build and deploy a unified pan-European payment solution.
It should be noted that the agreement with the respective shareholders of Currence iDEAL and Payconiq remains subject to the approval of the relevant competition authorities.
The EPI did not disclose financial terms of the acquisitions of Currence Ideal and Payconiq. But a person with knowledge of the transactions said the businesses would cost up to €70 million in total. The person added that EPI had provisioned for up to €20 million to cover Payconiq’s annual losses.
Four new partners
In addition to the current shareholders that make up the EPI, four new shareholders have joined the initiative: Belfius and DZ Bank since the end of 2022 and ABN Amro and Rabobank, which together with ING have boosted the presence of the major Dutch banks.
For the historical shareholders, BFCM, BNP PARIBAS, BPCE, Crédit Agricole, Deutsche Bank, DSGV, ING, KBC, La Banque Postale, Nexi, Société Générale and Worldline, this is a further step towards ensuring European sovereignty in payments.
The European Payments Initiative was originally launched “build a European payment champion that can take on PayPal, Mastercard, Visa, Google and Apple”, but it has instead settled for a more modest start.
It will focus on launching a digital wallet and instant payments system in Germany and France by the end of the year.
It intends to roll out the offering to other European countries and add on new features such as BNPL financing, as well as digital identity features and integrate merchant loyalty programmes.
“EPI is delighted to welcome Currence iDEAL and PQI. Together, we will join forces to realise EPI’s vision as we build an innovative solution based on a new, unified instant payment scheme and platform for Europe,” comments Martina Weimert, CEO of EPI Company.
“EPI will leverage the strong operational experience, know-how and local market knowledge of these companies. We are developing a new, scalable platform to address the modern and evolving payment needs of European consumers and merchants in the best way.”
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