Digital Euro: make it work for merchants

As we have stated in March 2024, the digital euro has the potential to transform European payments – lowering the average cost of payments, promoting innovation & competition, and placing Europe at the forefront of payment technology. Merchants are the business end-users of the EU payment ecosystem and are currently limited in their ability to negotiate fair terms with incumbent payment service providers to offer consumers affordable products and services.

A digital euro that is fit for purpose for merchants will benefit consumers and enhance competition across the Single Market while reducing dependency on third country payment actors.

Now that the legislation to enable the digital euro and the preparations by the Eurosystem are reaching a decisive stage, we want to clearly express our expectations to ensure the digital euro realises the potential we see.

Key messages

• Compensation model: implement a simple and uniform cap of 4 cents per transaction for the merchant service charge instead of the caps proposed in the regulation.
• Offline wallet: enable offline use of the online digital euro wallet first to save time and cost and support consumer adoption.
• Limit basics and do those first: reduce the list of basic services where possible and launch basic services first, leaving sophisticated use cases (e.g. conditional payments) until later.
• Phasing: do in-store and e-commerce first to make the bulk of payments more resilient as soon as possible.
• Merchant holdings: allow merchants to hold digital euro to make payments to suppliers.
• Reuse infrastructure: implement a single open standardised European payments infrastructure that will benefit all stakeholders, making integration easier and allows public and private propositions to compete freely.