kathimerini.gr
Europe's Payment System Faces Existential Challenge from Global Players
The European Credit Research Institute urges Europe to enhance its payment system autonomy, noting the rise of card payments (39% of POS transactions, 45% of value in H2 2024) yet highlighting higher fraud rates compared to credit transfers. Europe is promoting instant payments and a digital euro to counter the dominance of non-European card schemes.
- How can Europe regain its competitive edge in the payments sector, given the dominance of global players and the implications for financial stability?
- The European Credit Research Institute highlights a critical challenge for Europe: competing with global payment players, particularly in card payments. Card use at point of sale surged to 39% in H2 2024 from 34% in 2022 and 25% in 2019, dominating transaction value at 45% compared to cash's 39%. However, card fraud rates exceed those of credit transfers, making the latter safer.
- What are the specific risks associated with the current reliance on non-European card payment systems, and how do these risks impact consumers and businesses?
- This dominance of non-European card schemes creates vulnerabilities for Europe's financial stability and autonomy. High, unregulated fees from international card networks persist despite the Interchange Fee Regulation. Europe aims to counter this by prioritizing instant payments directly from bank accounts, a sector where it seeks leadership.
- What are the long-term implications of Europe's push for instant payments and the digital euro, and how will these initiatives affect the broader financial landscape?
- Europe's strategy involves promoting instant payments through a new regulation that equates their cost with simple money transfers, aiming for faster, cheaper transactions. Development of the digital euro is another initiative that will complement cash and bank money. These actions are critical because seamless, secure payments underpin economic resilience, competitiveness, and innovation.
Cognitive Concepts
Framing Bias
The article frames the situation as an existential challenge for Europe, emphasizing the need for urgent action and highlighting the potential loss of leadership in the payments sector. This framing might unduly alarm readers and encourage a more interventionist approach than a more balanced assessment might suggest. The repeated use of phrases like "existential challenge", "new battleground", and "urgent need" contributes to this alarmist tone. The positive aspects of the existing European payment systems are highlighted extensively, while the benefits of the global systems are largely downplayed or left out of the analysis.
Language Bias
The article uses strong language to emphasize the urgency of the situation. Words like "existential challenge," "battleground," and "urgent need" carry a strong emotional charge. These terms could be replaced with more neutral alternatives such as "significant challenge," "competitive landscape," and "important consideration." The constant emphasis on the need for Europe to "regain ground" or "assert its leadership" also conveys a sense of urgency and competitiveness that might not be entirely neutral.
Bias by Omission
The article focuses heavily on the challenges faced by European payment systems in competing with global players, particularly in the card payment sector. While it mentions the rise of card payments and the issue of fraud, it doesn't delve into specific details about the types of fraud, the effectiveness of current fraud prevention measures, or the potential benefits and drawbacks of different payment methods beyond cards and direct bank transfers. Furthermore, the article omits discussion of the regulatory landscape outside of the EU, and how this impacts European firms attempting to compete internationally. This lack of wider context could limit the reader's ability to form a fully informed opinion on the issue.
False Dichotomy
The article presents a somewhat simplistic dichotomy between European and global payment systems, framing the competition as a struggle for dominance and financial stability. It doesn't fully explore the potential for collaboration or the possibility of a more nuanced balance between domestic and international players. The implied choice is either European dominance or continued global dominance, overlooking the possibility of co-existence or more intricate market structures.
Sustainable Development Goals
The article highlights Europe's efforts to enhance its position in the payments sector, promoting innovation and infrastructure for digital payments. Initiatives like the development of the digital euro and the push for instant payment solutions contribute to a more efficient and innovative financial infrastructure. This aligns with SDG 9, which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.