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ECB official urges Europe to develop own global payment services
EUROPEAN Central Bank policy maker Yves Mersch called on Europe to develop its own global card payment services to compete with international peers and as a defence against any further escalation in geopolitical tension.
Noting the dominance of California-based PayPal for online payments, and the services offered by Alphabet, Apple, Facebook and Ama-zon, Mr Mersch warned that Euro-pean providers such as Germany's Girocard and France's Cartes Bancaire are too nationally focused.
"Our reliance on non-European card schemes for domestic payments in Europe is suboptimal," he said on Monday. "I fear that global giants from outside Europe will use their network power to increase their presence further."
The ECB board member, whose portfolio at the central bank includes payment systems, said European banks seemed to have "surrendered" much of the business, with the strong regulatory framework in the Euro-pean Union "exploited" by multinationals. Chinese companies Alibaba and Tencent were also advancing, he said.
Mr Mersch noted the risk of such dependence on third countries at a time when tariff threats from President Donald Trump's administration are raising tensions between the US and its trade partners. While the EU shouldn't resort to protectionism to "artificially" promote its own payment services, it should address the lack of European 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 said. "In the current geopolitical environment, such risks are, unfortunately, not as remote as they once were, and need to be taken seriously by European policymakers." BLOOMBERG