The common characteristic of these innovators within the retail payments field is that they primarily focus on the end customer and target customer ties, often with the aim of better integrating payment initiation and/or payment receipt within the commercial value chain. Fintechs tend to build platforms of their own, to sell their technologies and/or to partner with banks. Established internet/e-commerce companies which have already established a large customer base consider integrating payments into their ecosystems as the natural next step. Some operate peer-to-peer platforms where efficient small value payments between individuals are a prerequisite for an efficient business model. Others simply enter the retail payments market because they have a large customer base (i.e. a natural network) and the necessary technology to transmit and process information in real time between a large number of customers. To reap the benefits of their large global customer base they tend to adopt a global approach when marketing their services. A common feature of established platform providers is that they are able to operate their payment services at very low levels of revenue as they do not necessarily need them to be profitable. They rather look at their overall business and use payment services to enhance the overall customer experience in their ecosystems and thereby increase customer loyalty, acquire better data on customer behaviour and launch personalised advertising.

The competition from outside Europe is not a problem per se as long as European user needs are properly taken into account and governance arrangements ensure that European stakeholders (market participants and public authorities) can sufficiently influence decisions in line with European user needs. That said, European stakeholders’ lack of influence could prove to be an issue. For example, the lack of migration to the EMV standard and chip & PIN authentication in the United States affected international card scheme rules that apply to European payment service providers, resulting in (ceteris paribus) higher card fraud also in Europe.

Concerns over the lack of influence of European stakeholders underline the importance of the Eurosystem’s efforts in promoting the emergence of innovative pan-European payment solutions that are based on common standards and that can compete in the market. The (re)emergence of fragmentation along national borders or the establishment of silos based on proprietary solutions competing for the market are deemed undesirable and may warrant public policy intervention. Therefore, the pan-European instant payment scheme has major significance for Europe as it will be instrumental in keeping one of the central elements of innovation under European governance.