Banking, payments and merchant associations published written feedback to the European Central Bank’s Euro Retail Payments Board (ERPB) engagement on the digital euro’s “fit in the payment ecosystem”, focusing on the business model. Across responses, stakeholders emphasised potentially high one-off and ongoing costs for payment service providers (PSPs) and merchants, urged maximum reuse of existing infrastructure and standards, and called for clearer and fairer remuneration arrangements, particularly where “open funding” separates the wallet provider from the commercial account and liquidity holder. Cost concerns centred on building and running new processing and workflow layers alongside existing channels, continuous connectivity to the Digital Euro Service Platform (DESP), fraud and dispute management, AML/KYC and sanctions compliance, holding-limit monitoring, liquidity management via (reverse) waterfall funding, reporting, and the incremental complexity of offline functionality and physical card provision. Merchant feedback highlighted potentially material acceptance investments (terminal and gateway upgrades, certification with acquirers, POS and accounting changes, staff training), with requests for technology-neutral requirements, avoiding mandatory support for multiple acceptance technologies, and materially lower merchant fees, including fixed-per-transaction pricing and free low-value payments; some respondents argued for simplifying the model by removing inter-PSP fees, while others argued remuneration must reflect all “corners” in a 6-corner setup and align liability with the direct digital euro intermediary. Several respondents recommended a staggered, “keep it simple” rollout, starting with the simplest digital-only use cases (notably P2P and POS) and delaying more complex features such as open funding, shared/multiple account constructs, and certain offline and non-digital features. One banking group noted that members are undertaking an externally supported cost survey based on the latest rulebook and intend to share results to inform compensation discussions, while merchant representatives called for a grace period and controlled testing before mandatory acceptance.
European Central Bank 2025-03-07
European Central Bank ERPB consultation on the digital euro business model draws calls to limit scope and clarify compensation
Banking, payments, and merchant associations gave feedback to the European Central Bank's Euro Retail Payments Board on integrating the digital euro, highlighting concerns over high costs for providers and merchants. They urged maximum reuse of existing infrastructure, clearer remuneration, and a staggered rollout focusing on simple digital use cases. Merchants emphasized technology-neutral requirements and lower fees, with some advocating for removing inter-PSP fees and aligning liability with digital euro intermediaries.