On 16 June 2022, the European Central Bank (ECB) published a speech by Executive Board member Fabio Panetta entitled ‘Bringing European payments to the next stage: a public-private endeavour’. In his speech Mr Panetta discusses the EU’s retail payments strategy and the introduction of a digital euro.
Key points in the speech include:
- SEPA has become a model of successful partnership between public institutions and private intermediaries. SEPA’s success was its ability to rely on a strong coalition of private market participants which united all payment services providers around a common vision.
- Innovative digital retail payment solutions are not widely available in all European countries, and even less so on a pan-European basis. If the EU fails to meet users’ demand for innovative payments, others will fill this gap. And this may in turn raise more fundamental concerns. For example, global technology companies are taking on a greater role in providing front-end solutions to customers and whilst these companies may help improve efficiency, relying too much on a handful of non-European providers and on infrastructures operated abroad could ultimately harm competition.
- The ECB is facing the growing challenge of ensuring central bank money remains available and usable for retail payments in an increasingly digitalised world.
- For a digital euro to be successful, everyone should be able to use it for digital payments throughout the euro area.
- The ECB sees financial intermediaries having a crucial role in distributing and promoting the digital euro and by design it will not crowd out existing private financial instruments. Instead, it will preserve the coexistence of central bank money and private money, supporting innovation by private intermediaries.
- The EU’s digital euro project may provide a suitable opportunity to establish the public-private cooperation that is needed to build the pan-European private retail payment solutions of the future.