Today the European Payments Initiative (EPI), the bank-backed project for developing a payment wallet, said it plans to acquire Belgian mobile payment app Payconiq founded by ING and Dutch payment platform iDEAL. Four additional banks have joined the EPI, including DZ Bank, Belfius, ABN Amro and Rabobank. We will show how the digital euro could be part of the reason for the rejuvenation of the EPI.
As background, the EPI originally had 31 bank members and two acquirers and planned to build a European card network to replace Visa and Mastercard. It shelved the card plan a year ago and refocused on a digital wallet and payments. Twenty banks dropped out.
Today’s announcement focuses on bank-based payments, which are at the heart of both companies. iDeal allows Dutch online shoppers to pay directly from their bank accounts. iDeal was used for 1.2 billion payments last year and for 70% of all e-commerce transactions in the Netherlands.
“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,” said Martina Weimert, CEO of EPI Company.
Strategically, taking a successful app and expanding its geographic footprint makes far more sense than starting from scratch. Payconiq provides similar functionality to iDEAL but has a broader range of applications supporting in-store, online, p2p and invoicing for professionals to receive payments.
With the new shareholders, all of Payconiq’s shareholders are EPI stockholders – Belfius, ING, KBC and Rabobank. Similarly, iDEAL was owned by Currence, which ABN Amro, ING and Rabobank control.
EPI priorities going forward
The EPI has outlined its priorities which start with P2P payments and person-to-professional payments. Mobile and online shopping are next, with point-of-sale (PoS) payments as the final leg. That latter one could prove the most challenging because it has to get past the point of sale integration hurdle.
By the end of this year, the EPI aims to launch its digital wallet and P2P payment functionally as a pilot in France and Germany. A market launch in Belgium, France and Germany is planned for 2024. The EPI says these three countries represent more than half of non-cash payments in the Euro area.
When the Association of German Banks published its position paper on the digital euro, it was quite direct that banks should not be expected to bear the implementation costs. And that includes a digital wallet. It suggested the EPI could be a foundational building block for the digital euro. With the latest digital euro paper released yesterday, the European Central Bank is clarifying that it won’t just be banks that are intermediaries of the digital euro.
Meanwhile, the new shareholders join the current ones, which are BFCM, BNP Paribas, BPCE, Crédit Agricole, Deutsche Bank, DSGV, ING, KBC, La Banque Postale, Nexi, Société Générale and Worldline.