The European Central Bank (ECB) said on Friday it has signed agreements with three European standards bodies to reuse existing open payment standards for digital euro transactions, in a bid to reduce integration costs for banks, merchants and payment service providers.
According to to the ECB, the agreements with the European Card Payments Cooperation, Nexo Standards and the Berlin Group will enable the ECB to apply standards covering tap-to-pay contactless payments, merchant-to-payment provider connections and alias-based payments such as mobile number transactions.
The ECB said that using existing open standards would minimize market implementation costs and aid create a uniform experience for users of the digital euro currency across the euro area. However, standard agreements remain a step towards cost reduction, not a confirmation that the digital euro will be budget-friendly to implement.
Earlier ECB analysis reported by Reuters estimated that the digital euro could cost European Union banks between EUR 4 and 6 billion over four years.
The agreements show that the ECB is seeking to reduce one technical barrier to digital adoption of the euro. However, the move does not directly address the broader cost issue facing banks, which may still have to spend billions of euros to prepare systems, staff and compliance processes for the eventual launch.
Standards to be taken into account. Source: ECB
The ECB prepares the technical layer before the pilot
The ECB said the agreements were intended to encourage early coordination between payment service providers, standardization bodies and other market participants ahead of the possible introduction of the digital euro.
The central bank said Europe currently lacks a widely available open standard supported by payment terminals and remains largely reliant on proprietary standards owned by international card schemes and global digital wallets.
Related: The ECB supports tokenized EU capital markets with stringent barriers
The promotion of standards follows earlier indications that the ECB wants clarification of the technical framework for the digital euro so that banks and merchants can start preparing their systems. On March 25, ECB Executive Board member Piero Cipollone said the central bank expected to announce key technical standards by the summer.
The ECB is also separately recruiting payment service providers for a 12-month digital euro pilot, which is scheduled to start in the second half of 2027. On February 18, the ECB announced that the pilot will cover a confined number of payment service providers, merchants and Eurosystem staff, with payment service providers playing a key role in the digital distribution of the euro.
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