Tag: apple

Apple hit with antitrust case in India over in-app payments issues, BFSI News, ET BFSI

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NEW DELHI – Apple Inc is facing an antitrust challenge in India for allegedly abusing its dominant position in the apps market by forcing developers to use its proprietary in-app purchase system, according to a source and documents seen by Reuters.

The allegations are similar to a case Apple faces in the European Union, where regulators last year started an investigation into Apple’s imposition of an in-app fee of 30% for distribution of paid digital content and other restrictions.

The Indian case was filed by a little-known, non-profit group which argues Apple’s fee of up to 30% hurts competition by raising costs for app developers and customers, while also acting as a barrier to market entry.

“The existence of the 30% commission means that some app developers will never make it to the market … This could also result in consumer harm,” said the filing, which has been seen by Reuters.

Unlike Indian court cases, filings and details of cases reviewed by the Competition Commission of India (CCI) are not made public. Apple and the CCI did not respond to a request for comment.

In the coming weeks, the CCI will review the case and could order its investigations arm to conduct a wider probe, or dismiss it altogether if it finds no merit in it, said a source familiar with the matter.

“There are high chances that an investigation can be ordered, also because the EU has been probing this,” said the person, who declined to be identified as the case details are not public.

The complainant, non-profit “Together We Fight Society” which is based in India’s western state of Rajasthan, told Reuters in a statement it filed the case in the interest of protecting Indian consumers and startups.

In India, though Apple’s iOS powered just about 2% of 520 million smartphones by end-2020 – with the rest using Android – Counterpoint Research says the U.S. firm’s smartphone base in the country has more than doubled in the last five years.

The Apple case in India comes just as South Korea’s parliament this week approved a bill that bans major app store operators like Alphabet Inc’s Google and Apple from forcing software developers to use their payment systems.

“MIDDLEMAN IN TRANSACTIONS”

Companies like Apple and Google say their fee covers the security and marketing benefits their app stores provide, but many companies disagree.

Last year, after Indian startups publicly voiced concern over a similar in-app payments fee charged by Google, the CCI ordered an investigation into it as part of a broader antitrust probe into the company. That investigation is ongoing.

The India antitrust case against Apple also alleges that its restrictions on how developers communicate with users to offer payment solutions are anti-competitive, and also hurt the country’s payment processors who offer services at lower charges in the range of 1-5%.

Apple has hurt competitors by restricting developers from informing users of alternative purchasing possibilities, thereby harming “app developers’ relationship with their customers by inserting itself as middleman in every in-app transaction,” the filing added.

In recent weeks, Apple has loosened some of the restrictions for developers globally, like allowing them to use communications – such as email – to share information about payment alternatives outside of their iOS app.

And on Wednesday, it said it would allow some apps to provide customers an in-app link to bypass Apple’s purchase system, though the U.S. firm retained a ban on allowing other forms of payment options inside apps.

Gautam Shahi, a competition law partner at Indian law firm Dua Associates, said that even if companies change their behaviour after an antitrust case in filed, the CCI still looks at past conduct.

“The CCI will look at recent years to see if the law was violated and if consumers and competition were harmed,” said Shahi.

The CCI has plans to speed up all cases involving big technology firms such as Amazon and Google by deploying additional officers and working to more stringent internal deadlines.



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South Korea bans Google and Apple payment monopolies, BFSI News, ET BFSI

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SEOUL: South Korea’s National Assembly approved legislation on Tuesday that bans app store operators such as Google and Apple from forcing developers to use their inapp payment systems. South Korea is reportedly the first country in the world to pass such a bill, which becomes law when it is signed by the president, whose party has backed the legislation.

The tech giants have faced widespread criticism over their practice of requiring app developers to use in-app purchasing systems, for which the companies receive commissions of up to 30%. They say the commissions help pay for the cost of maintaining the app markets. The legislation prohibits the app market operators from using their monopolies to require such payment systems, which means they must allow alternative ways to pay.

It says the ban is aimed at promoting fairer competition. The bill aims to prevent any retaliation against developers by banning the companies from imposing any unreasonable delay in approving apps. The legislation also allows authorities to investigate the operations of app markets to uncover disputes and prevent actions that undermine fair competition.

Regulators in Europe, China and some other markets worry about the dominance of Apple, Google and other industry leaders in payments, online advertising and other fields. Chinese regulators have fined some companies for antimonopoly violations, while other governments are wrestling with how best to keep markets competitive. The Korea Internet Corporations Association, an industry lobby group that includes South Korea’s largest internet companies, welcomed the passage of the bill, which it said would create healthier competition.

Google said it is considering how to comply with the legislation. “Google Play provides far more than payment processing, and our service fee helps keep Android free, giving developers the tools and global platform to access billions of consumers around the world,” it said in a statement. Apple responded to an email reiterating a statement issued last week. “We believe user trust in App Store purchases will decrease as a result of this proposal — leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple.”



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RBI worried over growing clout of Amazon, Google and Facebook in financial services in India, BFSI News, ET BFSI

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As Amazons and Googles line up expansion in financial services in India, the Reserve Bank of India has expressed concerns over their presence.

Big Tech is a term used for the five most dominant information technology firms in the world —Google, Amazon, Facebook, Apple and Microsoft—that have market capitalisation ranging between $1 trillion and $2 trillion, each.

“Big Techs offer a wide range of digital financial services…of several advanced and emerging market economies. While this holds the promise of supporting financial inclusion and generating lasting efficiency gains, including by encouraging the competitiveness of banks, important policy issues arise. Specifically, concerns have intensified around a level playing field with banks, operational risk, too-big-to-fail issues, challenges for antitrust rules, cybersecurity and data privacy,” RBI said in its Financial Stability Report.

Big techs present at least three unique challenges. First, they straddle many different (non-financial) lines of business with sometimes opaque overarching governance structures. Second, they have the potential to become dominant players in financial services.

Third, big techs are generally able to overcome limits to scale in financial services provision by exploiting network effects. it said. Interestingly, the RBI concern comes at a time when the government is engaged in a tussle with the companies over media rules.

For central banks and financial regulators, financial stability objectives may be best pursued by blending activity and entity-based prudential regulation of big techs. An activity-based approach is already applied in areas such as anti-money laundering [AML] /combating the financing of terrorism; an activity-based approach is the provision of cloud services, where minimising operational and in particular, cyber risk is paramount, it said. Furthermore, as the digital economy expands across borders, international coordination of rules and standards becomes more pressing, it said.

Growing Big Tech clout

Facebook, Apple, Google and Amazon are leveraging their huge user bases to push their financial services. With consumer user data at hand, these companies can use it to curate personal financial products for them. which entered Indian fintech market in 2016 with Amazon Pay, has taken several strides. It has partnered ICICI Bank to issue credit cards, become a part of the Indian government’s payment network through the Amazon Pay UPI, launched insurance services, and entered into the digital gold space.

Google has partnered Wise and Western Union to enter the $470 billion remittance market under which Google users in the US can send money in Inda.

Also Read: BigTech and Cyber are the major risks for Banks and FIs: Sopnendu Mohanty, MAS



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European banks ready payments system to rival Visa, Mastercard, BigTech, BFSI News, ET BFSI

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A few large European lenders have teamed up to create a new European payment system, to compete with the US and Chinese systems and protect sovereignty in an important area of consequence.

The European Payments Initiative (EPI), previously known as the Pan-European Payments System Initiative (PEPSI), is a European Central Bank-backed payment-integration initiative aiming to create a pan-European payment system and interbank network to rival Mastercard and Visa, and eventually replace national European payment schemes such as France’s Carte Bancaire and Germany’s Girocard.

It is supported by the European Commission, and currently comprises 30 major European banks (including all the major French banks, Deutsche Bank and Commerzbank in Germany, Santander Bank in Spain and Intesa Sanpaolo and UniCredit in Italy.

It is tasked with creating a pan-European payments service that can be used to pay online as well as in stores, to settle bills between individual consumers and to withdraw cash at ATMs.

The rationale

EPI is born out of the need to protect the sovereignty and break a US-dominated “oligopoly” on payments.

In July 2020, a group of 16 major European banks from five euro countries announced the launch of the EPI with the aim to create a unified payment solution for consumers and merchants across Europe.

The realisation that a US president on any given day could decree Mastercard or Visa should no longer do business with a certain part of the population has prompted the initiative.

Europe’s banks are considering their own interests, aware that if they do not act now they could be challenged by tech companies such as Apple and Google, which are increasingly preying on their turf.

Today, four in five transactions in Europe are handled by Mastercard and Visa, according to EuroCommerce, a lobby group of European retailers.

While on the other side of the table, the banks and acquirers driving EPI process more than half of all EU payments.

The critical mass of business brought by banks such as Deutsche, BNP Paribas, ING, UniCredit and Santander give the EPI weight. The Brussels-based entity has until September to draw up a blueprint. If the banks behind EPI then give the green light, the first real-world applications could be launched in early 2022.

The hurdles

For a system to work, merchants should be ready to accept payments and users ready to make payments. . Having both in place at the same time is not an easy task, particularly since the full rollout could take years, and a bad start could kill EPI’s chances of success.

EPI’s backers have forked out €30 million to fund the initial development of a blueprint, but short of the “billions of euros” that are necessary. . One way to defray the costs could be to tap EU funds.



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Coinbase to allow users to use card via Apple, Google wallets

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Coinbase Global Inc launched a tie-up with Apple and Alphabet Inc’s Google on Tuesday that will allow users to add cards from their accounts to the payment apps run by the two tech giants.

The Coinbase card added to the wallets can be used to buy everyday goods with digital currencies, the biggest US cryptocurrency exchange said in a blog post. (https://bit.ly/3wN2wNN)

Also read: Investors cheer after RBI clarifies crypto trading isn’t banned

The company said it will automatically convert all cryptocurrency to US dollars and transfer the funds to a customer’s Coinbase Card for use in purchases and ATM withdrawals.

It also said users can earn crypto rewards on their shopping when a Coinbase Card is used with Apple Pay or Google Pay.

Coinbase’s move comes after PayPal Holdings Inc said it would allow US consumers to use their cryptocurrency holdings to pay millions of its online merchants globally, significantly boosting use of digital assets in everyday commerce.

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What’s the endgame of all the speculation & hoarding in Bitcoin, BFSI News, ET BFSI

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LONDON: Bitcoin‘s wild ride this week is far from unusual for the largest crypto token – but the rollercoaster is also its inherent contradiction.

Speculators betting for years on bitcoin becoming a stateless digital currency that’s widely used for online retail and payments are largely responsible for its parabolic price rises. But they also seed the sort of blinding volatility that makes that ambition almost untenable.

Bitcoin’s 30 per cent plunge on Tuesday after another Chinese government crackdown is not unique. Daily moves of more than 20 per cent have been frequent during the past 6 years. At almost 4.5 per cent, median daily price swings over that time period are more than 6 times that of the main Transatlantic euro/dollar exchange rate.

And while some online retailers might accept bitcoin as payment for goods priced in dollars, few could manage the potential accounting chaos of sticker pricing in bitcoin if its value can routinely shift by a fifth in just hours.

The flipside is true for buyers. If you think bitcoin’s price keeps on rising over time – much like the latest quadrupling over the past 12 months – then why would you surrender those gains by paying for anything with bitcoin today?

And so if that role as a transaction currency or stable store of value remains elusive, it’s essentially just a game of hoarding a finite number of tokens by small groups of people that routinely involves wild, illiquid swings whenever regulators pounce, backers tweet support or big players cash in.

As ever, arguments about pros and cons of crypto tokens divide among believers and non-believers – blind faith versus instant dismissal, cheer-leading versus scorn.

Deutsche Bank this week likened bitcoin belief structures to the so-called “Tinkerbell effect” – a theory drawing from childrens’ book character Peter Pan‘s claim that the fairy only exists because the kids believe she does.

“In other words, the value of Bitcoin is entirely based on wishful thinking,” wrote Deutsche analyst Marion Laboure.

Laboure estimates that less than 30 per cent of transactions in bitcoin are currently related to payments – the rest is trading, speculation, investment or related activities.

And she reckons its liquidity as an investment asset is low. With about 28 million bitcoins changing hands last year, that’s 150 per cent of all those in circulation – almost half the equivalent metric for Apple shares.

TINKERBELL, ARK AND MUSK
With a market capitalisation still about $1 trillion, governments can’t ignore bitcoin, even if central banks continue to dismiss its wider systemic importance. They may even welcome the fact its emergence over the past decade has spurred so-called “fintech” innovation as they gradually develop their own central bank digital currencies over the coming years.

But Deutsche’s Laboure reckons more crackdowns will come – and most likely the whenever bitcoin even looks like rivalling their currencies for payment.

“It is no surprise that governments are not inclined to give up their monetary monopolies. Throughout history, governments first regulate and then take ownership.”

If so, what’s the endgame of all the speculation and hoarding – which just further limits bitcoin supply and drives the price higher? Is it just “pass the parcel” while the music keeps playing? Or are people with money to burn punting for quick gains and trading strategically by timing entry and exits?

Some argue there is genuine demand for crypto transfers within the half trillion dollars per year of global remittances, as migrant workers often need to funnel money back to poorer countries with strict formal exchange controls.

Others claim crypto privacy features draw in demand from criminals, as per this month’s ransomeware hack at Colonial pipeline. But that will just hasten more regulation. Investment arguments beyond simply punting it ever higher range from a lack of “correlation” with other assets to a potential role as an inflation hedge – an odd assertion given its latest reversal comes amid all the post-pandemic inflation scares.

Powerful backers have a outsize say too, but are increasingly erratic.

Tesla billionaire Elon Musk drove the price skywards earlier this year by saying Tesla would accept bitcoins as payment for its dollar-priced electric vehicle and add bitcoin to the company balance sheet – only to backtrack last week by warning about excessive energy usage in bitcoin mining.

With no obvious rationale, star tech stock investor Cathie Wood of Ark Invest claimed this week that bitcoin would rise another tenfold again after it registered a 50 per cent loss in a month.

At the $500,000 level she posits, the market cap of bitcoin would then be $10 trillion – or a third of the entire M1 money supply of G20 economies.

London School of Economics‘ Jon Danielsson reckons that as a result of the concentration of bitcoin ownership, that sort of move would create new multi billionaires – or even the first trillionaire. And that would wildly exaggerate existing wealth skews as the gap between bitcoin haves and have-nots soars to intolerable levels, making a mockery of claims of crypto “democratisation”.

As a result, he thinks co-existence of bitcoin and so-called fiat currencies is impossible. It’s all or nothing.

If it replaces all G20 currencies in circulation, that would then see each bitcoin priced at $1.5 million.

Reality or fiction?

“Bitcoin is a bubble,” Danielsson concludes. “It makes sense to ride the bubble as long as possible – just get out in time.”

(By Mike Dolan, Twitter: @reutersMikeD)



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Crypto pros are getting tired of $79 billion Dogecoin joke, BFSI News, ET BFSI

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By Justina Lee

Nic Carter’s first foray into digital currencies was mining Dogecoin in his university dorm room back in 2013.

Created as a joke with the Shiba Inu dog breed as its logo, the meme-inspired token seemed more fun than Bitcoin and its community of diehards.

The 28-year-old now runs a crypto data provider that counts Goldman Sachs Group Inc. among its investors. He’s lost access to a trove of Dogecoin that has surged roughly 200,000% since the token’s inception. But like many industry pros, these days he has little affection for the coin — and has lost no sleep over his trapped profits.

“There’s this parallel industry of people that are just interested in running glorified bucket shops,” said Carter, co-founder of Coin Metrics based in Boston. “For most of us, we’re in this for ideological reasons. It doesn’t really affect us.”

The Dogecoin frenzy is reaching fever pitch as Elon Musk prepares to host Saturday Night Live with speculation he’s poised to talk up his beloved token. Coinbase Global Inc., the largest U.S. digital-asset exchange, plunged to a record low Thursday partly because it doesn’t offer enough speculative coins like Dogecoin. Robinhood, a trading app that offers the token, reclaimed the top spot on Apple’s U.S. App Store.

While its meteoric rise mirrors that of Bitcoin, crypto purists like Carter fear it’s a distraction from their grand project of deploying blockchain technology to revolutionize modern finance with everything from decentralized currencies to tokenized art. For those trying to lure big money into the industry with old-school risk controls, the memecoin doesn’t help institutions take crypto seriously while being far too risky for portfolios.

At BKCoin Capital, a $60 million quant fund, founding principal Kevin Kang says Dogecoin is off-limits.

“This could well be a ‘sell-the-news’ event where large holders sell before his appearance on SNL, leaving retail investors with the losses,” he wrote in an email, referring to Musk. “There’s nothing beyond this speculative asset — there are no developers on it, and we’ve not seen ‘smart money’ or institutional investors allocating.”

Bitwise Asset Management didn’t include the token in a a $1.1 billion index fund tracking the 10 largest cryptocurrencies even though it’s now the world’s fourth largest worth $79 billion.

Before Gemini — a crypto firm founded by the Winklevoss twins — announced Tuesday that it would support the coin, none of Bitwise’s custodians would touch the token. That meant the firm couldn’t be confident its holdings were safe for its more conservative clients.

“There are concerns that its spectacular rise suggests that the market is somehow overheated,” said Matt Hougan, an expert in exchange-traded funds who’s now chief investment officer at Bitwise. “To the extent that some quarter of the internet community wants Dogecoin to exist and will use it among themselves, I think that’s beautiful. But I don’t think it threatens the institutional global scale of Bitcoin.”

Crypto pros are getting tired of $79 billion Dogecoin joke
Dogecoin surged 96% in the past week, Coinmarketcap data show, a move largely seen as the epitome of a speculative frenzy spurred by massive stimulus spending and social-media chatter. Over the same period, Bitcoin has risen 4%.

Even Musk on Friday urged his followers on Twitter to “invest with caution,” linking to an earlier video in which he said crypto should be considered speculation for now.

While outsiders might paint all digital assets with the broad stroke of newfangled excesses, critics in the know see fundamental distinctions.

Whereas Bitcoin was the pioneer for distributed ledger technology, Dogecoin grew out of that. There’s also little coding activity on the latter, a sign of stagnation to critics. Unlike Bitcoin, supply isn’t finite, and there are still relatively few Dogecoin transactions, a symptom of its essentially speculative nature.

“There are question marks around the general status of the software around Dogecoin,” said Konstantin Richter, chief executive officer and founder at Blockdaemon, a blockchain infrastructure provider. “It’ll catch up. If Doge is super valuable and people can make money building applications on it, they will.”

There are some cases where perhaps the buzz can inspire practical use. Mark Cuban, the billionaire owner of the Dallas Mavericks and Dogecoin booster, said at the Ethereal Summit on Thursday the basketball team has sold more merchandise denominated in the token than it did for years in Bitcoin.

For crypto faithfuls, it can be hard to champion one but dismiss the other. After all, it’s difficult to tell if digital assets such as Ethereum or Uniswap that do have use cases are growing for technological reasons, ideological ones or simply because a deluge of cash has flooded the nascent industry.

In any case, the very pointlessness of Dogecoin is no matter for some funds — as long as there’s volatility. At YRD Capital, a fund that allocates to algorithmic strategies, co-founder Yuval Reisman says its traders recently jumped on board to profit from the gap between Dogecoin’s spot rate and futures.

For Carter at Coin Metrics, now four years into his crypto career with some 137,200 Twitter followers, the rebel has become the establishment. He observed that Dogecoin has appealed largely to younger people who trade on Robinhood, follow TikTok rather than Twitter and find Bitcoin old-fashioned. He also reckons it’s won new fans because its low unit price — 61 cents — makes it seem less intimidating than Bitcoin at $57,340 though day traders can buy just a fraction of the latter.

Recalling the Dogecoin he still owns somewhere, Carter stresses that Bitcoin loyalists like him feel no regret about ignoring the puppy.

“You have to make peace with the fact that nonsense is going to go up all the time,” he said. “That’s not my concern. My concern is making Bitcoin as robust and functional as possible.”



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Warren Buffett sees a ‘red hot’ economy with creeping inflation, BFSI News, ET BFSI

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By Katherine Chiglinsky

Warren Buffett delivered a clear verdict Saturday on the state of the U.S. economy as it emerges from the pandemic: red hot.

“It’s almost a buying frenzy,” the Berkshire Hathaway Inc. chief executive officer said during the conglomerate’s annual meeting, which was held virtually from Los Angeles. “People have money in their pocket and they’re paying higher prices,” he said.

Buffett attributed the faster-than-expected recovery to swift and decisive rescue measures by the Federal Reserve and U.S. government, which helped kick 85% of the economy into “super high gear,” he said. But as growth roars back and interest rates remain low, many — including Berkshire — are raising prices and there is more inflation “than people would have anticipated six months ago,” he said.

Buffett reunited with his long-time friend and business partner Charlie Munger for this year’s meeting. Munger didn’t make it to last year’s meeting in Omaha, Nebraska — Buffett’s hometown — due to the shutdowns across the country. Some shareholders were relieved to see the duo fielding questions together again.

“I really feel that both Charlie and Warren displayed their usual and amazing level of acuity and intellectual energy,” said James Armstrong, who manages assets including Berkshire shares as president of Henry H. Armstrong Associates.

Buffett and Munger spent hours fielding questions, from the economy, to climate and diversity, the SPAC boom, taxes and succession. Here’s the lowdown:

Climate Pressure:
Berkshire faced pressure from two shareholders proposals, one to improve transparency related to its efforts on climate change. The topic was bound to be a feature at the meeting — and it was.

When asked about the proposals, Buffett stuck to his previous stance. Measures to produce big reports on diversity and climate for his business lines spanning energy to railroads were, he said, “asinine.” The proposals were later voted down.

Buffett was also asked about Berkshire’s stake in oil and gas producer Chevron Corp., which it disclosed earlier this year. Buffett said he felt “no compunction” in the least about its ownership in the company, which he said had benefited society in many ways. While he acknowledged the world is shifting away from hydrocarbons, people on the extreme sides of either argument are “a little nuts,” he said.

Greg Abel, chairman of Berkshire Hathaway Energy, called climate change a “material risk.” He added that they’re setting targets and spending $18 billion over 10 years on transmission infrastructure.

Killer SPACs:
Buffett warned investors that Berkshire might not have much luck striking deals amid the boom in special purpose acquisition companies that gripped the market over the past year.

“It’s a killer,” Buffett said about the influence of SPAC companies on Berkshire’s ability to find businesses to buy. “That won’t go on forever, but it’s where the money is now, and Wall Street goes where the money is.”

Buffett, 90, also spent part of Berkshire’s annual meeting Saturday addressing the recent boom in retail and day trading. A lot of people have entered the stock market “casino” over the past year, he said.

Tax:
Buffett said President Joe Biden’s proposals for a corporate tax hike would hurt Berkshire shareholders. He added that antitrust laws and tax policy could change things for the company but new tax laws wouldn’t alter its no-dividend policy.

Succession:
Buffett and Munger, 97, fielded the majority of questions at Saturday’s meeting, but their two top deputies Abel and Ajit Jain, who runs the insurers, also shared the stage. Investors were able to get a closer look at the pair who are considered the top candidates for the job.

Munger dropped a little mention of the post-Buffett years that drew speculation on social media about the most likely candidate to succeed Buffett. The CEO was pointing out that decentralization doesn’t work everywhere because it requires a certain type of culture that businesses need to have.

“Yeah, but we do,” Munger insisted. “And Greg will keep the culture.”

Abel has long been considered the top candidate to replace Buffett, especially when he was promoted to a vice chairman role overseeing all non-insurance operations, which gives him a wide array of responsibilities, including oversight of the railroad BNSF and the energy business.

Errors:
Buffett offered a few mea culpas during Saturday’s meeting. He noted that selling some Apple Inc. stock last year was a mistake and even said that Haven, the health care venture with JPMorgan Chase & Co. and Amazon.com Inc., thought it could fight the “tape worm” of American health care costs but the worm won.

“That was probably a mistake,” Buffett said of those Apple stock sales last year. Berkshire still owned a roughly $110 billion stake in the iPhone maker at the end of March. “In fact, Charlie, in his usual low-key way, let me know that you thought it was a mistake too,” he said to Munger, who shared the stage with him.

Cash Pile:
Before the annual meeting started, the company released its first-quarter earnings, giving investors a dive into the 19.5% operating profit gain during the period.

Berkshire ended the quarter with a near-record $145.4 billion of cash on hand as it continued to generate funds faster than Buffett could deploy them. But Buffett also ended pulling back on some capital deployment levers during the period. He bought back just $6.6 billion of Berkshire’s own stock, short of the record $9 billion set in prior quarters, and ended up with the second-highest level of net stock sales in the first quarter in almost five years.



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European banks plan ‘home grown’ rival to Visa and Mastercard by 2025, BFSI News, ET BFSI

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A pan-European payments network can be in place by 2025 to make the continent a “master of its own destiny” in a sector dominated by American duo Visa and Mastercard, the project’s top official said on Wednesday.

The European Payments Initiative (EPI) was launched last July and became an interim company in December with 22 banks as shareholders.

The banks have until December to commit to implementing over the following three years the new network for a physical payment card and digital counterpart.

European Union and European Central Bank policymakers have long wanted a “home grown” payments scheme which they could regulate directly and build “autonomy” in core financial services.

“We can bring choice to consumers but also to merchants in the future,” EPI Chief Executive Martina Weimert told an online event.

European consumers have traditionally preferred using cash but a trend towards digital and contactless payments has grown, fuelled by lockdowns to fight the coronavirus pandemic.

“This will give us and for the whole European economy more sovereignty, more independence, becoming masters of our own destiny here,” Weimert said.

Priority will be given to European players in building the new network, she added.

Deutsche Bank, UniCredit, BNP Paribas , ING, Societe Generale and Sabadell are among the 22 banks from seven EU countries, including France, Germany and Spain who are backing the venture, with another seven national markets in discussion over joining.

It would be normal for EPI to take time to build up trust among consumers, just as PayPal and Apple Pay did, she said.

“We think that we can nevertheless have a very nice market positioning at the European scale because of the size of the European market, and 50% of all transactions in the euro as still cash transactions,” Weimert said.

“I am not saying we want to have cash disappearing but at least reducing part of it.”



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