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Europe’s planned rival to Visa and Mastercard appeals for public funding

Europe's planned rival to Visa and Mastercard appeals for public funding
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The European Payments Initiative (EPI) was launched last year and is seeking to get more banks and other payment players by December to finalize plans to start rolling out the instant payments network and cards.

A planned European payments network backed by 22 banks appealed to compete with US duo MasterCard and Visa on Tuesday for public funds, saying its private backers were not ready to raise the money needed.

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The European Payments Initiative (EPI) was launched last year and is seeking to get more banks and other payment players by December to finalize plans to start rolling out the instant payments network and cards.

Public funding will be good,” Martina Weimert, chief executive of the EPI, said at an event held by the European Payments Institutions Consortium. “Let’s not hide it – it would be a huge investment. It’s expensive.”

Retailers said they were not willing to pay for it, while banks and other EPI shareholders “can only afford so much,” Wemmert said, without giving details of the investment required.

Deutsche Bank, Unicredit, BNP Paribas, ING, Societe Generale and Sabadell are among 22 banks from seven countries in the European Union, including France, Germany and Spain who are supporting the project.

Read also: Explanation | Why did the Reserve Bank of India prevent MasterCard from issuing new cards in India?

The European Union has been keen to achieve strategic autonomy in financial services, such as reducing reliance on US MasterCard and Visa for cross-border card payments. It is unclear whether this will extend to financial support for the Expanded Program on Immunization.

Weimert said the EPI is now in a “critical phase” of decision-making over the next few weeks.

It said it will build a new system and replace a large number of national systems to reduce fragmentation and overlap in payments, with the aim of launching peer-to-peer transactions in 2022 on the basis of instant payments, followed by e-commerce.

“It’s a big shift so it’s going to take time. Anyone who tells you it’s an easy call and let’s do it fast and dirty, well, not really looking to change the European ecosystem,” Weimert added.

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