Wero, bank cards, digital euro… Payments have become a major issue. The observation is now shared, but the means to achieve European sovereignty still diverge widely between the actors and States. In the eyes of Hervé Sitruk, president of France payments forum, time is running out in the face of increased competition from the United States.
Payment: kickoff for Wero, replacement for Paylib
LA TRIBUNE – Is the launch of Wero, the new pan-European payment service, really a priority for banks?
HERVE SITRUK – Wero is the current major European project, and its deployment to individuals is underway. It mobilizes the energies and ambitions of all European stakeholders, because it is a major, essential project and a promising future for the Europe of payments.
What are Wero’s stakes ultimately?
Wero is a fantastic project because it brings together, well beyond the banks, European public authorities, commerce and all payment players, up to the large industrial payment companies, who want a sovereign Europe of payments.
It is a project which aims both to create a major European brand, and a pan-European solution, from pre-existing bricks. It will concern a European submarket, covering more than 60% of pan-European payments. It is also an innovative project, which combines the advantages of instant transfer, and certain advantages of the payment card. Finally, it is an ambitious project.
Initially, he certainly wanted to cover the entire spectrum of payments, from card to instant transfer. But the first phase of the project ended with the abandonment of the project scheme (payment scheme, Editor’s note) pan-European card, while the French banks were ready for it. Wero, however, retains the ambition to create a large scheme on instant transfer. And to cover all instant payments in Europe, as well as to take action against the supremacy of schemes international maps in Europe. Finally, it is ambitious since it also attacks Big Tech, and in particular Apple, and other Xpay solutions.
Will Wero’s promoters have enough strength to take on the major American card networks?
Wero will inevitably come up against three walls. The first is the firepower of the large American card networks (ICS, International Card Services, Editor’s note), on a financial and technical level, and their levers that they have patiently built over 40 years, and which must be flushed out. . But also to the power of other Big Techs, who do not want a European solution, because Europe must remain a hunting and expansion ground.
Then, Wero will come up against the ambitions of local European markets, which will want to defend local solutions, without seeing that they are thus opening the door to international competitors. It’s a false competition between schemes. The real duel is between banks and other payment service providers (PSP). THE schemes must be at the service of the PSP.
Finally, Wero risks coming up against the digital euro, which is a duplicate, originating from central banks. However, we must support the project. It must serve as a bulldozer to open the road to European payments and European sovereignty in payments.
What place should we give to the digital euro?
First, let’s remember that the digital euro project has changed. It was originally a defensive project against digital currency projects of private actors, such as Facebook with Diem (formerly Libra), and stablecoins. It has become a technical project in itself, as the threat of stablecoins has greatly diminished, although it has not disappeared. And there, his ambition changed.
Its objective is not simply to respond to the downward trend of the euro in cash, but to tackle new areas of payment, such as remote payment. This is what is debated. This is all the more debated as the digital euro is not a short-term necessity. Several places are debating it, such as in New York or London, or have even given up on it, as in Switzerland.
Is the digital euro a threat to banks?
The risk is twofold. It can divert the necessary investments for digital payment, payment security, defragmentation and European sovereignty, as with Wero, or even for a European card. However, they are urgent and a priority. It can then compromise the credit sector by siphoning off part of bank deposits, even if the ECB does everything to avoid this. This is the fear of many European states.
To tell the truth, this digital euro project is inevitable in the long term, but it comes at the wrong time, and should simply be postponed. Especially since with the regulation on the legal tender of the euro and the MiCA regulation, the place of the fiat euro will be reinforced. Central banks should prioritize their efforts towards a wholesale cryptographic currency, a sort of wholesale token of the euro, which the Bank of France has successfully tested, and which the ECB is testing.
Bank cards will celebrate its 40th anniversary. What lessons can we learn from this industrial success for the future of payments?
Cartes Bancaires is today the leading European domestic card payment system, both face-to-face and remotely. And the card is still the most innovative, most secure, least expensive means of payment and the one that provides the most services and guarantees to users, cardholders and merchants alike.
Its success is due to several factors, such as solid interbanking and universality of payments and withdrawals in France, an approach where the objective is not capital appreciation as with schemes international cards. There are therefore many lessons to be learned for the Europe of payments: the need to bring together payment service players to build together a solution that suits everyone. And finally, and above all, replace the competition between schemesto leave room for competition between payment players, banks or non-bank PSPs.
How to overcome the fragmentation of the payments market in Europe?
Christian de Boissieu, vice-president of the Cercle des Économistes, had already written that “ everything happens as if we are not taking full advantage of the single market “. Already in 1993, a first report on interbank organizations in payments in Europe described a patchwork of payment systems, with very varied payment cultures and domestic systems. Today, the market has not worked, there has been no banking or industrial consolidation, the schemes international are dominant, and the euro has changed nothing.
For the future, the digital euro will not change anything either. And it is no longer a question of cultures, but of competition between domestic systems. This is changing. We therefore need European political and regulatory will to impose European infrastructures and commitments from each European state to contribute to a single payments market in Europe, including through industrial and banking consolidations.
The future European strategic plan in payments should serve both to define a common target in Europe, and to define the contributions of European States to a single payments market. But there also needs to be will on the part of market players, a rethinking of the schemes European payment systems to seek convergence and adopt the bests practices.
Does this European desire really exist in payments, as was particularly the case in aeronautics with the creation of Airbus?
The European Commission cannot act without the agreement of the States, and there are 29 States in Europe, of which 2, France and Germany, carry out more than 40% of payment transactions, and 8 which carry out more than 70 %. Therefore, it is very difficult to call into question something which is assimilated by each European state as an element of its sovereign power.
Already, the debate on the legal tender of the euro shows that there is no agreement between European countries, even though we are 22 years after the creation of the fiat euro. To move forward, we need real strategic will at European level. The ECB and the euro, even digital, are not enough. We need strong European payment systems, which will necessarily involve industrial, and probably banking, consolidation. And above all, we need political will.
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