On 26 November 2019, the European Central Bank (ECB) published a speech given by Benoît Cœuré, ECB executive board member, entitled “Crossing the chasm to the retail payments of tomorrow”.

In his speech, Mr Cœuré explains the ECB’s governing council decision to relaunch its retail payments strategy. The aim of the strategy is to actively foster pan-European market initiatives for retail payments at the location of the purchase or interaction (POI payments). The ECB is of the view that for the strategy to work, these market initiatives would have to fulfil five key objectives:

  1. customers should be able to make POI payments throughout the EU just as efficiently and safely as in their home country. Pan-European reach with wide merchant acceptance and sound and efficient governance is necessary to achieve critical mass;
  2. the payment experience must be flexible and user-friendly for both consumers and merchants. Payments should be performed using different tools and instruments, such as payment cards, mobile phones and instant payments;
  3. the solution must provide the highest levels of fraud prevention and offer consumer protection with robust complaint and refund procedures;
  4. the solution should have a common brand and logo to foster European identity; and
  5. the solution should be accessible to merchants based outside the EU.

Mr Cœuré states that the proposed solution would be based on the SEPA credit transfer instant (SCT Inst) scheme. He calls for a strong commitment from the proponents of the new initiative and a clear roadmap to meet the envisaged objectives. He also suggests that the European Commission could propose legislation requiring payment service providers to adopt instant payments within a certain period if a critical mass has not been reached by end of 2020.

The ECB will continue to monitor how new technologies change payment behaviour in the euro area. Mr Cœuré uses an example of introducing a central bank digital currency to ensure that citizens remain able to use central bank money in the event that cash is no longer used. With that in mind, Mr Cœuré does not want to discourage private market-led solutions for fast and efficient retail payments.