PARIS (Reuters) – France’s central bank governor called on Tuesday for the creation of a European-wide payments system for retail purchases to rival emerging competitors from the United States and China.
Bank of France Governor Francois Villeroy de Galhau said that innovation in financial tech and by big tech firms meant payments was no longer a “mere boring back-office technicality”.
“The raw truth, however, is that the European payments market is already dominated by non-European stake-holders,” Villeroy told a finance conference in Paris.
“Furthermore, the growing role of non-European digital firms — be they American or Chinese — offering payments solutions should be taken seriously,” he said.
European banks have failed in the past to develop a serious rival to Visa and Mastercard. Now they are facing new pressure from emerging technologies like mobile phone payments, where the Chinese have made big strides domestically.
Facebook’s recent announcement that it aimed to introduce a new digital currency was a new wake-up call to the European financial industry and regulators, wary that Europe would be once again left without its own home-grown solution.
Real-time payments have been possible in the 19-country euro zone since 2017, but only about half the bloc’s banks have joined the scheme that underpins those transactions and it is mostly used for domestic payments.
“I call for the creation of pan-European payment solutions, building on a common brand and on the technical success of the Target Instant Payment Settlement infrastructure,” Villeroy said.
The European Central Bank began the TIP service for settling electronic payments at the end of last November, but banks have been slow to adopt it, even though it is cheaper and more secure than their own systems, ECB board member Benoit Coeure said on Sunday at a conference in southern France.
(Reporting by Leigh Thomas; editing by Bate Felix, Larry King)