ERPB

Michael Salmony 0:12

Hello, this is Michael Ralf and Javier from the Trilogue where we again want to do a short summer episode on a particular topic.

We may actually be doing more of these, but we thought we would look at some European institutions, some of the organizations around payments and see what they're doing. Are they doing the right thing? What are they doing? And the one we've chosen today is the ERPB, European Retail Payment Board, I think. I used to be a member of that, but I haven't been for a long while. it's, maybe we could get a little bit of help from Javier. What is it and what's its goal?

Javier 0:49

Okay, well, I can check their website and it is defined as this. The ERPB is a high-level strategic body tasked with fostering the integration, innovation and competitiveness of euro retail payments in the European Union. It was launched on 19 December 2013 by ECB and replaced the SEPA Council, which was co-chaired by ECB and the Commission. So this is the formal definition.

It's a grand definition, so it's a submission. It's very impressive. see, fosters integration, innovation and competitiveness. It's too many things and too important things. It also recognizes that it is limited to Euro retail payments. So it's just a part, a fraction of the wider and more diversified European Union. But at least it's the engine of the European Union.

the Euro song. So that's the formal definition. think personally, think that even with many imperfections, I think it's something that has had positive results. So it has been good. It's good to bring together to the same table different actors coming from the supply side, the demand side, and having a kind discussion on certain topics and try

to identify what are the issues, are the subjects that could be tackled by such a body. So that is good, even with the many imperfections, it may be criticized by the outside world.

Michael Salmony 2:31

Okay, that's very helpful. the retail payment board tries to get all the actors from all sides of the market together to discuss strategic issues. That is the idea. It is of course retail. So again, we are ignoring 80 % of the market or the corporate payments, but that's another topic. But if we just stay within retail, maybe Ralf, you could just take us through who are the major people in that board.

Ralf Ohlhausen 2:56

Yeah. So as Javier mentioned, so it is there to provide a balanced ⁓ view between the supply side and demand side. So to have everyone around the table from the supply side and the demand side. And so from the supply side is obviously the banks, so the three banking groups, the

private banks, the savings banks and the cooperative banks, but also the non banks. So we do have ⁓ the electronic money institutions, EMA, which by the way, I was some time ago representing there, but then also the payment institutions EPIF and ETPPA, which ⁓ I'm representing now. So that's the supply side. you have, ⁓ importantly, also the EPC.

I in my mind actually sort of having the like the leading role of the supply side there because it's ⁓ the representative of the community of all PSPs and that's bank and non bank PSP. So they have the overarching view there and ⁓ yeah, I ⁓ have a very strong voice in the ERPB. And that's what Javier doing for many years everything since I can think actually. it was a ⁓

me, he always felt that he was like co-chairing it's really there. we have then on the other side, the demand side, where we have the consumers, know, you have the BEUC and I think the Age Platform. And then there is also representatives from the retailers, the offline retailers, that's EuroCommerce the online internet retailers, that's Ecommerce Europe. ⁓

Also business and corporates, by the way, ⁓ in there. So EACT, Business Europe ⁓ is having that seat and small and medium size. So SMEs, which is represented by SME United and also national public administrators. So that's the supply side, demand side balance. But then now we also have the Eurosystem ⁓ in there. So there are five national central bank.

representatives in there, which are rotating between all the whatever 27 there are. And there is one National Central Bank representing the non euro NCBs. and coming back to your introduction, it's not the European retail payments for it's a euro retail payments board.

And but anyway, so we also there's also non euro representation in there, there is observers, the many the European Commission. ⁓ At times, there are guests at for the last few times, there was a Acquirer association. And when they say guests, it's sort of like they're there to on trial to become a member more or less, so they will probably likely to become a member. So that's the Acquirer association EDPIA And, and the whole thing is chaired by the ECB by their

Director General for payments. That's currently Piero Cipollone as a member of the executive board of the ECB. So that is how it is structured, which is meaning that it really represents the whole market. have stakeholders, you have all stakeholders there. And this has been very valuable that there is a recognized part, a body that has where everyone

trust to have all stakeholder views viewed. So for example, when we had the digital euro project starting, there were different, you know, advisory boards, was a market advisory group or whatever, then there were different ways of doing it. But eventually, the ECB thought, okay, well, the ERPB is the best and actually only body that we have in Europe that represents all stakeholders, really, and so that no one feels left out. If we have ⁓

that the ERPB reps represented somewhere like in the digital euro project.

Michael Salmony 7:12

Okay, that's very helpful to understand that. I mean that immediately raises some questions if you have such a large group of people with such diverse interests, are you ever going to get any meaningful consensus there? ⁓ So that'd be interesting to understand. Or maybe just a little bit about the practicalities. I mean how often do they meet? If they're very strategic.

Presumably they set the roadmap for the next few years and don't need to meet so often, but there's so much changing, which means that maybe they should meet more often. Javier, can you help us a little bit how they balance these topics?

Javier 7:43

Yeah,

Usually, there are two meetings per year scheduled. ⁓ In June this year, they have skipped one, but that's something really exceptional. So they conceive a couple of meetings per year, which, as you say, may may be somehow artificial. Sometimes you need to have more meetings and sometimes you may

⁓ go ahead without ⁓ having a formal meeting. But this is a formality and you have to have couple of meetings. Most of the time is used in ⁓ information or reporting ⁓ topics. So it's the Commission reporting on the legislative initiatives or the ECB reporting on the progress of the Digital Europe project or the EPC reporting on how

instant payments are progressing. And there are many topics which are just ⁓ reports from the different stakeholders. And it has become more and more difficult to identify truly strategic issues to be discussed. ⁓ lately, we have been asked ⁓ several on several occasions to propose topics. And we have not yet ⁓ identified really important ones. Maybe fraud is one of the

of the topics that should be ⁓ addressed from a strategic point of view with ⁓ the collaboration of all the stakeholders. But it is less and less easy, I would say, to identify truly strategic issues that could be discussed at the table.

Michael Salmony 9:29

That's a bit disappointing because of course that was of course the expectation, right? And I remember when I was there in the early days of the ERPB, I was representing a large group of banks. They were very long term strategic, big, big topics. When I look at the agenda of the ERPB now, they look at the sort of QR code, technical standardization and lots of reports like you're saying. So that doesn't seem to be doing its job. And I think a lot of people seem to be quite...

concerned whether the ERPB is really fulfilling its ⁓ role of strategy in shaping the future of Europe. Is that too critical, Javier, or do think that's fair?

Javier 10:07

Well,

I would agree with you and I would say that yes, that's why they have taken some time off to really rethink what would be the functioning of the ERPB in the future. So what I expect is that for the next meeting, I will not be there, but for the November meeting, they will propose some changes to the functioning of the ERPB that could address those concerns that you have well identified.

Ralf Ohlhausen 10:09

you

Michael Salmony 10:35

and Ralf you also, so I would say that you don't need to like...

Ralf Ohlhausen 10:37

Yeah.

If I may, because I always felt that it was of great value. Well, in the early days when I was there, I mean, what I didn't what it is like was it was very, very, very structured. Maybe you have to do it that way. If you have so many different players around the table, but it was really like ⁓

very narrow what has been discussed and a lot was done in writing and ⁓ you got the minutes before the meeting actually because it was already clear on what was all to be discussed and agreed and then only if the meeting differed from it then the difference was amended. So it was really really ⁓ stiff basically. So we were hoping and we were trying to open that a bit more up.

And, but nevertheless, it had on their agenda, the main topics. for example, it being there was a lot of open banking, ⁓ there was a working group on which was quite valuable also on the operational side of ⁓ open banking, it was driving instant payments. And ⁓ very efficiently there at the beginning. And, yeah, and also like an

trying to create a framework, a governance framework for instant payments at the POI. then some and the idea was always and there was also sort of the SEPA account thing, access scheme ⁓ initiated there, there was a working group for that. The idea was always that you have like the high level agreement done at a working group of the ERPB and then

to do the implementation or the actual work. So most of these projects were handed over to the EPC for implementation or for doing some groundwork. So for example, on the Instant Inst@POI working group after we were, well, sorry, let me start with SPAA. So once we had the SPAA high level agreement achieved,

Then it was handed over to the EPC as a scheme manager to implement it. And that's what then happened. Similarly, for the Inst@POI, there were a number of recommendations coming out of the initial working group, which were then to be looked at by the EPC, like QR code, NFC, BLE standardization, like whatever how the interoperability could work. But for the latter,

It was planned to be to then be taken back and to create that governance framework. And that was then did not happen. It was stalled. my and maybe if I can bring it up here, in my view, that had to do a lot to do with, from my point of view, the bank side not really wanting to pursue it this way. And also now as the ERPB is being reviewed, and there was some, you know,

I've on all stakeholders were asked what is good, what is bad, what should be changed. So we provided our input. I have the impression that specifically more from the bank supply side, there is hesitation to use it more and there would be a preference to use it less. Well, Javier tell me if I'm wrong? That's my impression.

Javier 13:57

Well, I think it's a question of priorities in the different banks. They will choose some higher priorities to implement and maybe it's not in the top priority list to invest on those solutions. I think it's a question of the market adopting a particular solution or not. But I don't think that there is a concerted action by banks. It's up to each bank

to choose what to do or not.

Michael Salmony 14:32

Okay, that sounds fair, Okay, maybe as a final question, this could be a platform for sort of public-private alignment, cooperation, understanding. Is that working?

Javier 14:46

I think it helps. think it helps. My summary is that even with all its imperfections, it is a valuable body. it has had a childhood which has been difficult, stiffed as Ralf was saying, probably needs now more flexibility on its functioning. It needs also to split in between the technical work and the political representation because...

So far it has been mixed. There is only one kind of body where to discuss and technical issues are mixed ⁓ up with political representations. And maybe we need to split and have a technical debate maybe ⁓ earlier than the political meeting when you have to represent your constituency. That I think would make sense in the future. But what I think is that some measures will be implemented

to it ⁓ more effective for the future and really to address the strategic needs of ⁓ not only euro, European payments market.

Michael Salmony 15:55

Good to hear. Ralf, any thoughts?

Ralf Ohlhausen 15:55

Okay, could I because

you know, I one of my big concerns now going forward is that I saw the ECB so far like here chairing this body like a more neutral position mediating between the demand side and the supply side of retail payments and

But now with the Digital Euro project, think it sort of changes the situation a little bit. So the ECB becomes a supply site member of here. they're not just having cash money, which is sort of not in competition with electronic payments of the private side, but... ⁓

Michael Salmony 16:27

They react to themselves.

Ralf Ohlhausen 16:46

If they're going to in the online digital euro, then it will be obviously in competition with other electronic payment solutions. And therefore, they're losing their neutral position here. And so if you want if we want to have if that goes ahead, and if we do want to have a public private dialogue here, then we will need another body who is more neutral in this to bring this together. ⁓ Where the different supply solutions

have an equal voice and not one sort of stronger than other. So that's, ⁓ I think, one of my questions for it going forward.

Michael Salmony 17:22

That's why you pointed to the commission in the last...

Javier 17:24

pieces.

Michael Salmony 17:26

Yeah, yeah, that makes sense. Yeah. Okay, wonderful. I think we've traversed this one of the bodies beginning with E and there are probably another 20 other ones we might be doing in the future. So I hope you find that entertaining, what's interesting and thank you again to Ralf and Javier and to all of you listening to this episode and look forward to seeing you next time.