Banks in the European Union could have an instantaneous payment system by 2020, according to a Reuters report of June 26.
According to the report, real-time payments have been possible in the euro zone since 2017, but only about half of the banks in the bloc adhered to the initiative. Still, Reuters says the adoption could accelerate now that Facebook’s stablecoin, Libra, is shaping up as a competitor to local banks.
Banks must evolve faster
The director general of the European Payments Council, Etienne Goosse, said that, despite the success of Facebook’s Libra project, the competition of technology companies is here to stay, and that banks must evolve faster. Goosse notes that large technology companies have a significant advantage over the fragmented banking system.
“They come with a global solution, under a global brand that offers many things that consumers seem to find wonderful. So we do not have time.”
Goosse also noted that although the EPC instant payment standard has been adopted by about 60% of lenders and payment service providers in the euro zone. It could be extended to all banks in the block by the end of 2020. Reuters also points out that other officials confirmed that 2020 was a credible goal, but also pointed out that for the system to cross the borders of the entire euro area it would have to be covered.
Facebook can help fintech initiatives
Finally, Reuters points out that an instant payment system may not be enough to avoid the loss of user fees in fintech initiatives that only require the user to install an easy-to-use mobile application. Facebook can also use its social and chat platforms in its favor.
As Cointelegraph reported earlier today, the head of the Federal Financial Supervision Authority of Germany has urged regulators to develop standards in response to Facebook’s next cryptocurrency, Libra.
Last week, the Bank for International Settlements based in Switzerland commented on the threat that the entry of major technology companies in financial services could pose to the banking sector, according to Cointelegraph.
Also published on Medium.