The news: The European Payment Initiative (EPI) will pilot an instant payments scheme this year after agreeing to acquire two fintechs, Dutch payment scheme iDeal and mobile payments app Payconiq, per Financial Times.
How we got here: EPI is a coalition of major European banks, credit institutions, and other payments firms that joined together to build a pan-European payment network to compete with the likes of Visa and Mastercard. But those plans were scuttled last year after multiple partners backed out of the initiative.
Why it matters: The digital wallet will support peer-to-peer (P2P) payments before extending to consumer-to-business (C2B) payments, both online and at the point-of-sale (POS). EPI chief executive Martina Weimert said the coalition’s refocus was partly in response to proposed legislation from the European Commission last year to speed up instant payments adoption.
This pilot will bring it to two markets that can help it to reach this goal:
Will it work? The EPI can address instant payments fragmentation and help the EU reach its instant payments goals outlined in the legislative proposal. But it will still have to contend with digital wallets like PayPal, which has a strong global presence of 112.3 million international core users.
Being backed by banks could help the EPI stay competitive with other wallets by potentially charging lower prices. It may also become a threat to networks, which thrive on enabling cross-border payments.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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