EU must challenge PayPal, Apple in payment services — ECB

FRANKFURT AM MAIN: European Union countries must foster payment services that work across the continent to boost its financial sector and reduce dependence on third countries like the United States, a top European Central Bank official said.

“Large non- European companies now play a significant role in the provision of payment services in Europe, while European banks are focused solely on serving their national market,” ECB board member Yves Mersch told a Paris financial regulation conference.

Despite a series of European directives aimed at harmonising the payments market, “European banks seem to have surrendered much of the pan? European payment business,” he complained.

“Instead, those foundations are often exploited by multinationals from outside Europe offering innovative, consumer-friendly solutions,” he added, pointing to the head- start enjoyed by US tech giants like Paypal, Google, Amazon and Apple or Chinese firms like Alibaba and Tencent.

Now banks – still mostly siloed within individual EU nations – are integrating services like PayPal or Apple Pay into their products piecemeal, without worrying about pan-European compatibility.

The same is true of card payments, with national systems like France’s Carte Bancaire or Germany’s Girocard incompatible witheachanother, whileAmerican services like Mastercard or Visa are accepted almost everywhere.

What’s more, he charged that lenders are dragging their feet on issues like granting technical access to startup ‘ fintech’ (financial technology) companies, which could develop homegrown innovative payment services.

Mersch also added his voice to a growing chorus calling for greater European financial independence from America as the transatlantic alliance has wavered since the election of US President Donald Trump.

With hundreds of millions of Europeans using American payment providers, “we have to be mindful of the fact that extraterritorial jurisdiction could, in a worst? case scenario, affect the operation of those companies and disrupt payments between European counterparties,” he warned. — AFP