With the European Commission on the cusp of bringing in new legislation, which will cover the digital Euro and instant payments in the region, it is likely to open up new opportunities for open banking, according to Maria Palmier, Head of Public Policy at Yapily.
The implementation of the bill marks a key step in the EU further overhauling its regulatory infrastructure on digital currency, as the region looks to strengthen payment capabilities and financial inclusion through the introduction of a central bank digital currency (CBDC).
Steps taken by the EU follow numerous nations looking to overhaul their stance on CBDC, with the UK ruling out the creation of one, despite bringing a relatively positive perspective on digital currencies.
When it comes to instant payments, the potential role of open banking is pivotal, with the EU eyeing reduced friction and fragmentation when it comes to cross border transactions.
Palmier, who is head of public policy at open-banking infrastructure provider Yapily, commented on why the steps being taken by the EU can see open banking further thrust into the forefront of the payment space.
She stated: “The introduction of EU-wide instant payments legislation has the potential to open up a whole new range of use cases for open banking payments, enabling businesses to create more personalised and competitive products for their customers.
“However, the current discrepancy amongst EU Member States when it comes to the use of SEPA Instant Payments is a critical pain point for EU merchants and consumers. Whilst the announcement indicates that payments is at the top of policy agenda in 2022, to truly address the fragmented market of cross-border real-time payments and spur open banking initiatives across the region, the Commission will need to collaborate with local regulators, governments, banks, and fintech communities to ensure a swift, cost-effective, and robust implementation in the months to come.”