ECB's Cipollone: Digital euro needed to end Europe's reliance on non-European payment schemes

ECB Executive Board member Piero Cipollone used a speech in Riga on Tuesday to argue that Europe faces a structural dependency on non-European payment infrastructure and that the digital euro is the Eurosystem's direct response.

Cipollone identified three channels of exposure: the risk of outright disconnection from foreign-controlled systems, the extraterritorial reach of non-European legal frameworks into everyday transactions, and the ability of dominant international card schemes to set fees, technical standards, and dispute rules unilaterally. He noted that two-thirds of euro area card transactions are governed by non-European business rules, and that two-thirds of euro area countries — including all three Baltic states — have no domestic alternative for in-store card payments.

On merchant costs, he said average net merchant service charges in the EU nearly doubled between 2018 and 2022 despite regulatory caps, as international schemes expanded fee categories outside the scope of existing regulation. Smaller retailers face charges three to four times higher than larger peers, ultimately raising consumer prices.

Cipollone said the digital euro will be legal tender across the euro area, available online and offline, and will be processed exclusively through infrastructure registered in the EU and not controlled by non-EU entities. The Eurosystem will not be able to identify users, and offline payments will carry cash-like privacy protections.