The European Central Bank has signed agreements with three European standards bodies to use existing open technical standards for processing digital euro online payments.
The agreements cover the European Card Payment Cooperation (ECPC), nexo standards and the Berlin Group, with the ECB planning to reuse their open standards that are accessible to all stakeholders for digital euro payments, the ECB announced on Friday.
The ECB said the selected standards include CPACE, developed by ECPC, which supports contactless “tap-to-pay” using near-field communication between a device and a payment terminal.
They also include nexo standards specifications, which connect merchants’ systems with the back-end systems of payment service providers and “acquirers” — firms that process card payments for merchants — and are used for payment acceptance and cash-machine transactions.
The Berlin Group’s standards support payments using an alias such as a mobile phone number, and can be used for functions including balance checks and reconciliation across mobile devices, including digital euro payments initiated inside merchant apps on smartphones.
What it means for payments in the euro area
Europe lacks a universally available open standard supported across payment terminals and relies heavily on proprietary standards owned by international card schemes and global digital wallets, the ECB said.
It added that using widely adopted European standards would simplify digital euro acceptance and support a more uniform user experience across the euro area, while allowing European payment schemes to expand geographically and diversify use cases.
A national card scheme could expand to point-of-sale environments outside its home market without requiring technical terminal upgrades under this approach.
The ECB said the “benefits of the digital euro standard” would materialise ahead of any issuance, and linked wider rollout to the adoption of a proposed EU digital euro Regulation by co-legislators.
Once adopted, the Regulation would provide certainty that the standards apply across the euro area because of the digital euro’s legal tender status.
The agreements were signed after the standards were selected together with market participants represented in the Rulebook Development Group, and additional standards could be added in future subject to approval by the ECB’s Governing Council.
“This partnership shows our strong commitment to making sure the digital euro works with existing European standards that the private sector can also use,” ECB Executive Board member Piero Cipollone said.
