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The European Central Bank signed agreements with three European standard-setting bodies on Friday to support the processing of digital euro online payments through existing open technical standards.
The ECB said the arrangements with the European Card Payment Cooperation, nexo standards and the Berlin Group are designed to reduce adoption costs for payment providers, improve coordination across the market and make it easier for European payment solutions to operate beyond national borders.
Existing European Standards to Power Digital Euro
Under the agreements, the ECB will reuse several European standards already available to market participants. These include ECPC’s CPACE standards, which support contactless tap-to-pay transactions using near-field communication between a payment device and a terminal.
The ECB will also work with nexo standards, whose specifications link merchants’ systems with the back-end infrastructure of payment service providers and acquirers, including for payment acceptance and cash-machine transactions.
Berlin Group standards will support payments made through aliases such as mobile phone numbers, along with balance checks, reconciliation across mobile devices and digital euro transactions initiated in merchant apps on smartphones.
Reducing Europe’s Payments Dependence
The ECB said the move comes as Europe still lacks a universally available open standard supported across payment terminals, while relying heavily on proprietary systems controlled by international card schemes and global digital wallets.
By using widely adopted European standards, the central bank aims to create a more consistent digital euro payment experience across the euro area. It also expects the approach to help European payment schemes expand into new markets and develop additional use cases without forcing merchants or payment providers to make costly terminal upgrades.
For example, the ECB said a national card scheme could extend its services to point-of-sale environments outside its home market without requiring technical changes to existing POS terminals.
Regulation Seen as Key Trigger
The ECB said the full benefits of the standards would emerge once EU co-legislators adopt the digital euro regulation, which would provide legal certainty for market participants and confirm that the standards apply across the euro area.
Piero Cipollone, ECB Executive Board member and chair of the High-Level Task Force on a digital euro, said the partnerships reflected the central bank’s effort to align the digital euro with existing European standards:
The open digital euro standards will provide a European free alternative to current proprietary standards, make it easier for new European providers to enter the market and give European payment service providers and merchants the certainty they need to invest, innovate and compete across the euro area.
The ECB said the standards were chosen with market participants in the Rulebook Development Group and support the Eurosystem’s payments strategy. Additional standards may be added later, pending approval from the ECB’s Governing Council.
