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February 8, 2019

ECB eyes instant payments as opportunity to break Visa/Mastercard dominance

The European Central Bank (ECB) is weighing the possibility of using instant payments as an opportunity to link up national card schemes.

In a presentation at the American European Community Association, ECB executive board member Yves Mersch said that a true Singe Euro Payment Area (Sepa) for cards has not been implemented in Europe.

Cardholders are barred from using their national payment cards to make payments across Europe unless validated by a global card payment scheme. Currently this is dominated by Visa and Mastercard.

“Efforts to ensure the interoperability of schemes should be strengthened and should aim to foster a European identity, for example by using a common European logo to show users that their cards can be used across the EU,” Mersch noted.

Mersch also believes that instant payments at the point-of-sale could prove to be a more feasible option altogether.

According to Mersch, this will prove to be cost-efficient compared to cards.

Commenting on the issue, Mersch stated: “The industry sees the implementation of a European infrastructure for instant payments as an opportunity to instantly clear and settle card transactions, which would offer a possible way of supporting the interlinking and interoperability of national card schemes.

“Efforts to ensure the interoperability of schemes should be strengthened and should aim to foster a European identity, for example by using a common European logo to show users that their cards can be used across the EU.”

 

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