Taxes & Law

European Payment Initiative: What online merchants can expect

Fatih-Kağan Taşkoparan

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The European Payment Initiative (EPI) was launched back in 2020 to counter US providers such as Visa, Mastercard and PayPal with a European solution as a standardized electronic payment method. The new payment system was originally due to be launched this year. You can read here why the plan has now been scuppered and what the current mood is like. 

EPI: That was the plan

Payment service providers from seven European countries have joined forces for the European Payment Initiative with the aim of establishing a standardized payment system for retailers, but also for online merchants and their customers.

The goals were (and are) ambitious:

  • There is only one transaction from your customer's bank account to your bank account.
  • The EPI card replaces existing card systems such as Girocard - physically and digitally.
  • Payments can be made via digital EPI wallet and as instant payment.
  • In addition, P2P, e-commerce and m-commerce transactions and cash withdrawals are possible.
  • Using a mobile app, your customers can arrange instant financing with their bank at the touch of a button, e.g. via a consumer loan or a pay-later function.
  • Customers can view available credit in the app.

That sounds like a whole range of benefits and simplifications for your customers and for you. In the coalition agreement, the Ampel parliamentary group had also spoken out quite clearly in favor of the EPI procedure. Here it makes it clear that Europe  "an independent payment infrastructure and open interfaces for barrier-free access to digital financial services for all consumers and merchants" need. Actually a reason to be happy.

A bitter blow: banks in Germany bail out

However, the positive mood has evaporated in the meantime. The reason: participating banks are gradually dropping out. The following German banks out of a total of 31 banks in Europe had originally confirmed their participation:

  • Deutsche Bank 
  • Commerzbank 
  • DZ Bank 
  • Savings Banks Finance Group 

And now the damper: after Commerzbank initially backed out, DZ Bank also recently backed out. Commerzbank justified its decision by stating that the market coverage was low and the initial investment too high in comparison. DZ Bank followed suit and caused the whole system to totter: after all, its financial institutions make up around a third of the German banking sector. The consequences are not yet foreseeable. More than a slimmed-down version with far fewer functions is probably not to be expected at present.

The German Retail Association takes a critical view of the delays. He calls for banks and payment service providers to drive forward the design together with retailers. Due to current developments, however, it is necessary to lower the profit expectations and opt for realistic expectation management.

Online retailers are cautious

The mood among online retailers is also subdued. Almost a year ago, the results of a study by ibi Research on the topic of "Payment processing and receivables management in online retail in times of Corona": 70 percent of the online retailers surveyed saw the need for such a pan-European payment solution. However, even back then, 23 percent did not believe in the success of the EPI at all and 27 percent rather did not. This sentiment is likely to have worsened significantly with the current developments.

What's more, the solution could also become more expensive for online retailers. is reportedthat merchants could incur an interchange fee of 0.2 percent of the transaction value and a scheme fee. This would be significantly more than the current fees for accepting the Girocard.


The EPI is on the brink. Whether, when and in what form it can actually be launched is currently written in the stars. As an online retailer, you currently have no choice but to rely on the established payment systems and wait and see how things develop. 

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