People who have been waiting for a rival system to Visa and Mastercard will have to wait a tad longer. The European Payments Initiative aimed to achieve this goal, but the team has pulled the plug. When member banks see no long-term merit in this approach, the most logical outcome is abandoning the idea.
No Visa Or Mastercard Rival Yet
The plan by the European Payments Initiative (EPI) was rather ambitious. Developing an alternative solution to Visa and Mastercard would be beneficial to many. However, competing against industry behemoths is a steep undertaking that requires tremendous effort, research, and broader participation. Especially that latter aspect has been a problem for this initiative since day one.
That said, the EPI had the backing of nearly three dozen Eurozone banks, Worldline, and Nets. Unifying the pan-European payment system seemed like a possibility. Consumers and merchants would gain access to dedicated payment cards, digital wallets, and peer-to-peer payments. Many had high hopes for its operational phase in 2022, yet financing bega drying up in late 2021. Outside funding was an option but not necessarily a viable one.
As of this week, 20 of the 31 backing banks have left the Visa and Mastercard rival project. That includes all Spanish banks and Commerzbank and DZ Bank. Even though the EPI must adjust its scope and objectives, the French lenders remain committed to the plan. The card scheme will likely be abandoned altogether in favor of digital payments. That approach still opens up many opportunities.
For now, the dominance of Visa and Mastercard will not be threatened. That situation can change in the future, although anything major will happen seems unlikely. The EPI initiative was promising until these big banks started pulling out. Focusing on digital payments makes more sense in this modern day and age.
