EMPSA

Michael Salmony 0:12

Hello, my name is Michael Salmony and I'd like to welcome you to another episode of the Payments Trilogue where we have a guest with us, Chris Pirkner, who all the insiders in the payment industry will know because he has some very different views on some other people. And so really welcome to you, Chris. Maybe you could explain, I don't even know how to introduce you. Are you EMPSA? Are you Bluecode? Are you a EuroPA? Can you help us there?

Christian Pirkner 0:38

Yes, and thanks for having me and happy new year. Indeed a complex space, but my role has two hats. One is I'm the CEO of Bluecode, which is our own payment system. And the other is chairman at EMPSA, which is a combination of 11 others. So we're 11 of the ones, the brands, the payment nerds all know from Swish in the Nordics, to Bizum into the South.

We got together a few years ago and I'm humbled to be chairman of that association. So these are the two hats. And because you asked briefly, EuroPA is three of the EMPSA members who have made it public to actually go live with one of the use cases, namely the peer-to-peer use case. So it's using the EMPSA infrastructure slash API slash work, but it's the more public persona of our colleagues in Portugal, SIBS,

Bizum and Bancomat to basically have announced the peer-to-peer go lives.

Michael Salmony 1:45

Excellent. So maybe, Gijs, you want to ask Chris why he isn't joining EPI and setting up this competitive thing. Isn't that very naughty?

Gijs Boudewijn 1:53

Well, you caught me unprepared, Michael, because I thought Ralf was going to go first. Well, I was looking, of course, you know, is it EPI, it to be EMPSA, is it going to be whatever else? Of course, first, it's going to be a great year because we're not supposed to mention too many dates, but around the time we are recording, this is the first obligation of the instant payments regulation.

Christian Pirkner 2:19

exactly.

Gijs Boudewijn 2:20

and that will be a great start.

tailwind for instant payments based solutions, be it EPI wallets or be it EMPSA members like Bizum and others. So it's going to be great for A2A payments in the first place because this is in the context of A2A payments, this series. Indeed, I saw that two and a years ago, I was doing some research at MPE, you had it on the panel, I think with Olivier Denecker.

And it was also, of course, about what are the advantages or disadvantages of the bottom up or the top down. The bottom up is your solution. Nothing together, everything that's already there domestically versus the EPIs throw away everything that's already there and we built from scratch. And you said that usually you meet in the middle. It's about two and a half years ago that you said that. What is your view on that today?

Christian Pirkner 3:21

I guess it's still the same view. just takes a little longer in beautiful Europe. But it's indeed the complexity we're all chasing here is how money moves from one place to the other with regards to paying a point of sale, paying each other peer to peer or paying online and having a solid legal, commercial and technical foundation.

This is the three by three matrix, legal, technical and commercial. How does money move? And the use cases we chase the most are the point of sale, e-commerce and peer to peer. So how will it end up or where is this going? There is an unbelievable amount of activity in this payment space because it is the most frequent use case in our lives. And of course, with several hundred million people and thousands of institutional players.

Gijs Boudewijn 4:01

Mm-hmm.

Christian Pirkner 4:19

And the regulator, that's where you see all the flurry going on of trying to solve that puzzle. Is it coordinated? Not really. And that's the sad part, because you can only make this a success if they're scale. Payment is a scale game. If you don't get to scale, it won't work. So briefly, what happened over the last years, domestically, a few countries have tried to solve this puzzle on their own.

These are the EMPSA members, the Swishers in Sweden, the Vipps in Norway, the Bliks in Poland, the Bancomats, the Bizums, the SIBS, the TWINTs. They have solved domestically. And now we have another approach, of course, also by the Germans and the French predominantly to solve it again for their countries, which is their full right to do. And so now we have these, now it's 12 systems trying to solve this on their own. And of course, the goal now is, should one stop?

Gijs Boudewijn 4:56

We are here.

Christian Pirkner 5:17

and go on the platform of the other? That's course one choice. You saw it with Vipps and MobilePay. They've merged. Now they have one platform. Or should we in the meantime, until it's all one, or maybe work together to ensure we all get scale? And of course, the EMPSA approach is to try the latter, because time is ticking.

Gijs Boudewijn 5:38

before I hand over. So the funny thing is I cheated a little bit. asked the ChatGPT what to do and honest to God, the strategic path forward ChatGPT for you guys is amongst other things leverage EU support. And literally I read it out loud ChatGPT yesterday, align for your EMPSA thing, align with EU initiatives like the European payments initiative.

Ralf Ohlhausen 5:38

Yeah, could I?

Gijs Boudewijn 6:04

and the European digital identity framework to enhance integration and adoption. Aren't those wise words from ChatGPT?

Christian Pirkner 6:11

The door for collaboration with any and all projects, think, in EMPSA Spirit is all about collaboration. EMPSA Spirit means let's listen to each other, how we solve legally, technically, uncommercially that puzzle, and let's see if we can find common ground. So, EPI is now about to solve it, usually takes between five and 12 years to create such a system. So, EPI is now at the beginning of the five to 12 years.

And if we can help or if we can join forces in some way, I think the door is more than open. So if there was interoperability between EPI and some of the other players, I think that would make total sense. And that has been said since day one.

Michael Salmony 6:55

But

before handing over to Ralf, just to drill down on that, mean, isn't there a fundamentally different approach? I mean, you are going for interoperability and EPI says no interoperability. Is that exactly what you're

Christian Pirkner 7:10

I wonder if you say different

approach. The number of transactions that Swish alone makes, Swish, let's just take one of the 12. I think it's a billion plus. So that will take a good number of years to reach for EPI as well. And that's not a negative. I mean, they're just starting now, right? You have to reach a good portion, if not 100 % of POS places. You have to reach a good number of e-commerce places to get to these types of numbers.

And that's a journey. That's a decade. That's just how, that's just, I don't know, that's not, that's just reality. So the question is, should Swish or Bizum or Blik in the meantime wait or stop their offering and say, Dear Spaniards, 25 million of you are using this now. Hold on for four years. We will now wait for a second. I think that's not realistic. And I think it's not even helping anyone. So the question is,

We all want EPI to run, run, run, run, run, because Germany and France is a digital, I don't know, it's using nice words. It's not so well advanced with regards to these topics. And so if EPI can help solve that, that's great. And then let's see that the Germans who go to Italy can use EPI to pay into the Bancomat network. I think that's a good thing for the Germans and for the Italians.

Maybe it's too simplistic, but I think the golden bullet of payment is collaboration. The whole point of the industry is that issuers and acquirers work with each other through certain rule books. These things are part of life in payments.

Ralf Ohlhausen 8:53

Yeah, but Chris, the collaboration, I mean, I think it ends somewhere. there is, I don't know how much collaboration there is between Visa and MasterCard. So, know, yeah, I see there are different approaches. So we have the old, like what we used to call the open banking e-payments, OBEP approaches with iDEAL and Giropay and EPS and MyBank. And those guys are now joining forces somehow into EPI.

And so that's one way of doing it. It has already evolved, it will evolve further. Then there is or has been these national mobile or instant payment mobile approaches like Swish, Vipps, Bizum, TWINT, Twist, etc. And they are joined together with you and it's a different approach.

And it has been mobile from the start. It's been instant payments usually from the start. And you're using a different, you are using your own model for collaboration, like following the GSM principle there of roaming, which is, think, a great idea. And it works, it seems to work very well. And then just for completeness, there is, of course, also the bank independent, because both of these are bank owned, bank contracted approaches.

So I call it the EPI approach or the EMPSA approach. And then there is the third approach, which is the bank independent, the open banking one, maybe with SPAA, with or without SPAA. So we have our ERPF there as well. So those for me are the three that exist. And then there is the, I don't know, black horse or swan or whatever you want to call it, the digital euro coming possibly as another version of it. But now coming back to EMPSA, so you're

Gijs Boudewijn 10:37

You

Ralf Ohlhausen 10:43

like GSM roaming model because I've used to work in telecoms. And of course this worked very well, but it worked especially well when there was no overlap between the players. So one country, one player, as soon as you had one operator operating in multiple countries, then you got into like competition and collaboration at the same time. And so how do you see that actually, especially with Bluecode, because you're not just like one country, right?

So how does that work out with EMPSA members?

Christian Pirkner 11:18

There is a legal angle and there is a reality. The legal angle is in EMPSA land we have on every single meeting since founding a lawyer present worrying about exactly the topics that we don't collude geographies because you can't and that's not a principle we endorse. You can't collude on pricing, right? So to adhere to the basic fundamentals of how Europe is built with regards to anti-competition law makes it somewhat hard to really find solutions if you can't talk about

certain things in depth, but that's Europe for you and we hold ourselves to it. So the question means everybody can go anywhere. I mean, you see Blik reaching out to multiple countries and I personally, I endorse this. The problem is big enough. We need everybody to go and do their best in solving real people's problems, real users or real merchants. Let's not forget those. And as long as everyone chases that.

I feel it's a big problem to crack and I'm not... And we as an association don't carve out who gets what.

Gijs Boudewijn 12:18

Yeah.

Ralf Ohlhausen 12:24

Maybe a quick follow up on that. me just a quick follow up on that because one of the main questions in this for me is the different pricing models. So what do you do if you have in one country, you know, you have to you had these trials as well between I think in Switzerland and with Bluecode I think or between two countries now you have three with EuroPA.

Gijs Boudewijn 12:24

But I think I may roll one more.

Uh-huh.

Ralf Ohlhausen 12:51

And so if you have different prices in two, three different countries, how do you get that roaming work?

Christian Pirkner 12:56

Very solid question. So now let's on the legal slash commercial side. The way the EMPSA is built, that one scheme, namely the payer scheme pays into the network of the acquiring side of the scheme. So these are two different schemes and now you have to bridge the commercials. The way this can only work is since we can't fix pricing and we don't, is to have some default of what an issuing scheme can expect.

from the acquiring scheme that it has paid into, but each member with the other can divert from that and create their own commercial in a bilateral setting. And you're right, some countries, these alternative payment methods have standard pricing that you could assume a debit card carries with it, because you have a debit interchange cap at 0.2 in Europe. So if you have something around this range, plus minus and some margin for acquirers, that's one set.

And that means there is a rough expectation what could come back to a payor scheme in that jurisdiction. Some other networks are very low priced, for historic reasons, for some other reasons, they're very low merchant service fees, which is great for the merchant. But of course, if you are the paying system, you're expecting more. So the only two answers there is either you're not getting it because the merchant service fee is not pulling it. So you have a choice to say I'm not roaming there. That's one.

Or you can say, I live with what I'm going to get because it's better than zero. So that depends between two combinations we have in the roaming exercise. Everybody can roam with everyone. But at the end, you're very right on the commercial side. It is the right between two of the parties to figure out the commercials if they don't adhere to a steady form.

Gijs Boudewijn 14:42

Yeah, but Chris,

we have that same puzzle to solve. still also vice chair of the Board of the European Card Payments Association, similar association, you're well aware. The domestic card solution is trying to figure out the technical interoperability is not the problem. We have our own kernel, et cetera. But how do you even out the business model differences between the countries, the cross solution fees? So you've solved it with a default fee.

with the possibility to diverge bilaterally, of course. But I would not believe that one could, in the absence of any... I mean, it could mean that as an issue, you would lose some money on an international transaction versus what you would get domestically if your domestic interchange is higher than what the default is. But you can't refuse to allow that transaction. I would assume otherwise.

So you will accept the default,

Christian Pirkner 15:38

Right, imagine

Europe of course is in an interesting situation. One of the largest industries of an economy, namely paying for goods and services, is regulated to a degree where there is a cap on what the issuing bank may earn. mean, for us now this is normal. For any human being that lives on a free planet, this is crazy. But it is what it is. So it is capped at a certain point.

Meaning if you're a European bank and you're expecting your 20 basis points on your debit interchange card within Europe, from that you have to pay your scheme fee to the international card system. If you run one, you have to pay your processor. And at least up to now, you have to pay Apple for the dear privilege to be inside the Apple wallet. So there's not much coming back. I mean, you're probably in the minus already, right? If you really do true accounting on a MasterCard debit transaction in an Apple wallet as a European bank,

Gijs Boudewijn 16:09

Yep.

Christian Pirkner 16:33

Not only have you given up the customer journey, and the data, and the revenue, so I think we Europeans, if we roam, we can do better than losing money on every transaction, almost no matter what we do. Apart from the main benefit that I see, every digital transformation, every single one of them, has worked out in the favor of the company that holds the customer journey.

Gijs Boudewijn 16:33

And in some cases, worse.

Christian Pirkner 17:03

That's the only thing that matters in a digital world. Digital music, as a first example that got disrupted, used to be CDs. Now we're all streaming. You are streaming through either Amazon music or Apple music or Spotify or YouTube, if you're watching the videos. These four. These four own the customer journey of most of us listening to music. These four have crafted their business model and they are in charge.

One makes it through advertising, one makes it through subscription. There's different ways. Same thing in video. We used to run around with DVDs. Now, who owns the customer journey? The Netflix app or the Disney Plus app or whatever. These guys, they own the business model and the data and the same thing in payment. The only question we all have to worry about. Who owns the pixels, the customer journey when you pay for goods and services? That's the only thing that matters.

So if we can, as Europeans, enable that we in Europe hold the journey, then we've made it. If we hand over the journey to other folks, which are totally fine, we can. We can make the decision to wave the white flag, like we did on social media, on messaging, AI, on digital good, on autonomous driving, you name it. We hand it over anyway. Now in payments, we have to make a decision. Do we keep the journey as Europeans? Is it in the banking app?

Is it in the joint wallet of banks? Who has the journey? Or do we hand over the journey? And that's the only question that's relevant because the one who owns the journey can do the plumbing behind. So Ralf, to your question, once you have a customer journey, if you're a PayPal wallet or if you're an Apple wallet, it's absolutely trivial to take the plumbing of either open banking once it finally works, if ever, or the digital euro or any of these things and make your business the same way you did. You just use other rails and nobody will notice.

Ralf Ohlhausen 18:38

Yep.

Christian Pirkner 19:01

The plumbing underneath, you can switch out without anybody noticing. Vipps and MobilePay, they merge. Now it's one platform, but the customer journey is held by Vipps. And so I think journey is all that counts.

Ralf Ohlhausen 19:13

But isn't it there where the wallet is then playing the center stage role and many of your member companies, are sort of acting through the bank app, not having their own separate app or wallet, working through the bank app, which is typically not the most favorite app or wallet that people are using. So this is where EPI

Christian Pirkner 19:32

Yep. No, there's only...

Ralf Ohlhausen 19:40

is maybe going the right way, I'm not sure, but with focusing on the wallet and having like the end to end ownership or flow of that and making that the dominant payment interface and experience.

Christian Pirkner 19:56

Fully agreed, and now I think we're at the crux of all of this. There's four ways this can play out. One, you wave the white flag and you hand over the journey to the others. Very possible that this is the outcome. Second outcome, some countries have chosen to, in terms of their own domestic way, to bundle forces and create one brand, one app. Take Swish as an example. I think we would all argue that is for Sweden, somehow it worked. People are using it.

and same as Vipps and others. Third element, you're building a hybrid. You're saying that there is one app for the smaller ones, like the let's say TWINT. UBS has a TWINT app and the Tedkabee has one and Post, but there's also an app framework built for the others. So that's the hybrid where you have a few, one to own the journey and others share the journey. Or you have the last extreme, everyone gets to keep the journey like Blik.

mean, Blik is a monster success and every bank has the Blik code in their banking app. There's no Blik app. So either give up the journey, do it all together, one app, do a hybrid if that's what your country or have every banking app do it. And again, I would be the wrong one to say what's right and what's wrong or that Brussels or anyone else can tell us what the right solution is for 300 million people. I think that's very tricky. Let the market play out.

Michael Salmony 21:09

I mean.

Gijs Boudewijn 21:21

But the point

Michael Salmony 21:22

Thank

Gijs Boudewijn 21:23

is,

Michael Salmony 21:24

you.

Gijs Boudewijn 21:24

the question is, why on earth are we having this discussion? Why on earth are we doing this in the first place? Why do we bother? Why do we care? Why do we worry? You said in the beginning, and I've re-asserted myself many times, what is the plan? What is it that we want to achieve here in Europe? We have a new president coming up in the US and things are well.

We could have a separate discussion on what that may mean for sovereignty of Europe in various respects. I'm not too optimistic about that, to be honest. But what is it really that we want to achieve here? And then we can have a plan and then we can say, well, there's multiple ways to do this. We all want to go to Rome and we are traveling at different speeds, different vehicles, but we all want to go to Rome. And apparently that is what we implicitly say we all want to go to.

European sovereignty, pan-European solutions, choice, etc. But there is still no bigger plan. And in the absence of that, we might well fall prey to, well, either those that we are trying to become an alternative to, the authorities saying, well, we have to do it ourselves. Let's do the digital euro and the EUID wallet, etc. Because the market players can't do it.

Christian Pirkner 22:41

I think the goal, and we would all agree, is to have our own sovereign rules and rails, technically, legally, and commercially, I'm so sorry, it always comes back to that, that govern how our money moves in Europe. And now what's the right answer to that? I'm very market driven. That's all I live by. Namely, who can capture the hearts and minds of the people using this, the end user and the merchants? Who can do this? And that's what should win. In the end,

That's what will win. The only thing that counts is who can capture the hearts and minds of their environment to do this.

Gijs Boudewijn 23:17

I can only guess

that would be something somebody or something from your

Christian Pirkner 23:21

I wouldn't claim to know.

That's what I'm saying. Blik pulled it off, which is really tough. Blik pulls this off even with having to do 20 integrations into banking apps and not having one wallet. Swish pulled it off the other way. Switzerland chose a hybrid. What's right, what's wrong? Let the market figure this out. The only thing we as Europeans, in my view, can say instead of dictating how it should work or instead of saying my way is the only way, trust me, I'll be done in 10 years.

I think the only way to say is, let's listen to each other. How did you win? Because frankly, there's a hundred million people in these 11 EMPSA systems. That is a lot of people and it's growing. It's only going upwards. There's billions of transactions. So my view is, let's thank God that we have a few digital success stories in this continent. We lost every single digital transformation in this continent and we will lose the rest.

if we continue this nonsense. So if we have a few winners, I mean, how amazing is this? The last thing you should do is kill the winners and wait for maybe another one. The way to do this, in my view, is listen, how did you win this? Why did you, in your approach, win out 90 % of the population? First of all, thank you. Second, make it 100. And third, what can we learn from you? And how can we help you that you can use the Swish app?

in Germany. How can we pull this off? And since you said, technically it's not really, I mean, we've shown it now, our little Bluecode system can now pay all over the world at more places than Visa. So it works. So the question now is only, can we pull ourselves together, stop the inviting, listen to each other and make ways where we can all pay within each other's grids? And what I predict, if we pull that off, will happen.

scale will win, meaning some will merge behind the scenes. Because it's right, it doesn't make sense to build basic payment platform 12 times over. That doesn't make sense. But first, win the journey. Once you've won the journey, you can plumb it in the background, stitch things together without anybody ever noticing to take cost and complexity out. But I think that's the only way to do this because we can't restart over and over and over again.

Michael Salmony 25:38

I mean, yeah.

Christian Pirkner 25:43

Germany has had Girogo, if you remember, then Giropay, then Giropay QR, then Giropay mobile, then Kwitt, then Kwitt for business, then Paydirekt, then #DK, then Paydirekt neu, then Giropay 2.0 and now Wero. So I've watched 10 systems come and go. And because I'm a little crazy about this, I read the scheme rules, read the API documents, what attributes are flying around, why are we redoing it for the 11th time?

But okay, let's do the 11th time. Let's all root for the success of the 11th one. But I would argue the ones who pulled it off, let them win. Go, go, go. And let's collaborate.

Michael Salmony 26:24

Wow, there's a lot of really clever stuff you're saying there, something we could all really learn from, absolutely. But there are a few scary things that you're saying there. I mean, one is we've lost all the digital transformations in all the other industries, and that probably impacts us because if everybody has an Apple in their hand and an Android in their hand, then you already know where the interface is going to be. Another thing is the timeline, right? You rightly say these things take typically a decade or...

Christian Pirkner 26:40

Dude.

Michael Salmony 26:52

or whatever you said, five to 17 years. And meanwhile, the regulator probably won't sit still. They will say, okay, if your industry can't get your act together, then we will do something. And meanwhile, PayPal and others will grow stronger. So that's not a very optimistic scenario you're painting there. I mean, you are fighting a valiant fight and you are gaining members and I love your interoperability approach, although I also hear what Martina is saying why interoperability is difficult. But is it realistic?

We're going to win. I mean, we have to get this sorted in a couple of years, not in 12, 15 years. And will the regulator and will PayPal and will Apple wait for us to get our act together?

Christian Pirkner 27:33

For sure not and that's why you know my life I grew up in Europe, but then I spent 15 or something years in San Francisco So I lived the other side of the pond. This is why I mean Apple was always my biggest customer I love I know my friends really well three of my best programs are in the iTunes team So when they call me up, but is a good we're gonna smash this thing Yeah, so these guys know what they're doing and if they own the journey They can't wait for open banking to come our way because if you get that

You get more or less free access with a webhook saying the transaction was successful. I mean, like a seven-year-old drunken child could put this into the Facebook app, the WhatsApp app, the PayPal app, et cetera, and then you're done with. You can write the European infrastructure for free and create a business on top of it where you have all the transaction data, you have all the use cases. I mean, this is a dreamland, right? So, but if that happens, then the outcome is clear.

If you have the digital euro come in and basically crowd out the local alternatives because it believes, let's start this again, attempt number 13, a decade goes by, you lost it all. Right. So yes, it's not easy, but I believe again, if we can show that this works, EPI in my view would be hugely helped and we would all be helped if we work together because then once EPI hits, it can actually pay in some other countries and the other way around.

If the digital euro, if it shall come, so if politically it is wished for, and it is a scheme on the issuing side, because of course the ECB can mandate the banks in Europe to issue this instrument. If you attach this scheme to the roaming element of EMPSA, you're done. You pay into millions of merchants. Next day, you're actually putting more traffic into the existing European champions. They would love it.

You're actually having a business model because these acceptance agreements are signed. They're actually the merchants is paying something. So you would actually really hit home. You would have a digital euro be live within a year and not 10 years. You would fire up the existing businesses in terms of more traffic and more volume. You would have ability to kick back something to the banks because there's business models in these things. And through roaming. And when we've showed it with the Alipay Plus interoperability.

now with the DGN interoperability, that's 70 million NFC merchants, 90 million QR code merchants, that's 160 million merchants, you will have the digital euro be global next day. And I think there is a way to pull this off.

Ralf Ohlhausen 30:14

But if you understand,

but Chris, if I understand you, if I...

Gijs Boudewijn 30:16

But they won't be roaming in the digit for the digital euro, Chris.

They won't be roaming, there will be one type of stuff.

Christian Pirkner 30:22

That's what I'm saying. If the belief is that the digital euro shall be an end-to-end system that needs to replace what's there, that's an argument to make. My worry is you will have two QR codes at the merchant, nobody will use this, or you crowd out the local system and that will be detrimental as well. So I think there is ways to design this really well, really well, the ECB and the euro framework can really

create a European digital success story beyond anything. And there's ways to design this where the opposite happens. And so that's why 2025 will be the most amazing year ever.

Ralf Ohlhausen 30:56

Chris, Chris,

I know. what you're assuming or you're saying, but you know, let's say we know that the ECB's plan is to create a commercial scheme. It is not just a payment instrument. So if I understand you correctly, you would think if it was a payment instrument like SCT Inst or some other, then it could be integrated, then you could work with it, then you could collaborate, then you could interoperate. But if it was a full blown end to end scheme, which is the plan,

Christian Pirkner 31:25

Right? Of course, because Bluecode is an end-to-end scheme, Swish is, Vipps is, so you would have another one. And if you have it join the roaming network, if the digital euro comes to a merchant that's here in my country, I can kick back the revenue like I would kick back to Swish or to anybody else. No, that's the thing. If they say that it must be that the last mile is also owned,

Ralf Ohlhausen 31:26

You can't, right? Or...

Gijs Boudewijn 31:44

They won't need you Chris, can't

Christian Pirkner 31:54

That's an option. In my view, I would design this to say every bank that is under the umbrella of the Eurosystem must issue at least one European system. Pick one, but it must at least one. If you pick the digital euro, pick it. But you must do one.

Gijs Boudewijn 32:08

But this is all

dreaming, keep on dreaming, this is not going to happen. let's start with the Mojit. No, no, come on, come on, let's stay a little bit closer to home. I mean, we can go to the moon, Chris, but these are not scenarios that are going to materialize. I have another one that's closer to home. And I would like to have your view on the EUID wallet that's going to be there sooner than the digital euro.

Christian Pirkner 32:13

No, no, wait a second. every must, one, think that's...

That will be very close. That will be a...

It all depends if we the industry explain the benefits.

Gijs Boudewijn 32:35

that you see it as a Trojan horse or also possibly for the American platforms who have their wallets and could make the EUID compatible and take the money and run with it, money and run with it.

Christian Pirkner 32:43

If you have

Very similar to the payment story by jurisdiction, every country can decide to have their own official wallet only or to allow others to run the identity wallet. We'll see where the chips fall. I think it would be very...

Gijs Boudewijn 33:04

Only Austria

will do that, right? All other countries won't. Austria is the only country that will stick with one Austrian wallet.

Christian Pirkner 33:11

Let's see, said the blind man. This journey is not yet fully over, but it depends again. Is the product, does it win the hearts and minds of the people using it? If so, then it has a chance of adding value and then incorporating a payment and anything else. If it doesn't win the hearts and minds of its constituents, then it will fail like everything else fails that doesn't do that. So in my view, it really depends. And that's why I'm not so sure what you're saying.

If we as the industry, there's in Europe, in my view, there's only two dozen, three dozen people who actually really are needed to pull this off. This is not rocket science. So if we were to figure out a strategy of how identity and payment works in such a decentralized way, I think the recipes are all there. I mean, we've shown that this works legally, commercially and technically. Nobody loses. Nobody loses.

The digital era would get an acceptance grid from day one. It would get distribution. We get more traffic. Everybody can pay with everyone. It's really, it sits right there on the silver tablet. And I really mean that this is not far-fetched. How much more can we do than I was in Finland and I was all over the world paying with the European system. This is real. So now the question is, can the two dozen people get together and nail that or can we not? And that we'll decide.

Ralf Ohlhausen 34:31

Yeah, because if you

Yeah, well,

Chris, we have discussed this here in our podcast a few episodes back. basically, I think we agree, we have actually come to similar conclusion that there would be a way of working this out together, but it's not looking like it's going that way. So we have these different streams going in different directions. One could say, okay, good to have competition at the end, those will win who have the best customer journey or the best offer to the merchant.

And maybe that's the way to do it, as long as we can make sure that we stay independent, or we keep it independent, or basically achieve this European sovereignty within each one of those different initiatives. And maybe that's the most realistic way to look at it.

Christian Pirkner 35:27

That's one real good way to look at it. I'm a little maybe a little more pessimistic, namely if we don't collect these energies, because there's only so many resources we all have, the banks have, the acquirers have, I mean there's only so much you can do in a full year. So if we don't coordinate a vision, a vision of how we all win, then I fear what you're saying is right. Everybody will run a certain direction, which is their fair right to do.

But then the scale will somewhat be lacking. And then for me, the worst is if mandates come along because of frustration, then the rest is history. We will lose this game for sure. Like we lost everything. Europe is a continent that regulates stuff where it doesn't even have an industry in it. So before it even gets going, we're regulating probably now autonomous driving. We don't even have a company doing it. We're regulating social media. We don't even have a social media company. We're regulating literally everything.

Michael Salmony 36:06

Thank you.

Christian Pirkner 36:26

without having any industry. It's almost like a homeless person that wants to regulate how you build buildings.

Ralf Ohlhausen 36:32

Yeah, with the

Michael Salmony 36:33

with

solution with a.

Ralf Ohlhausen 36:33

Silicon Valley of regulation, we already established that sometime.

Christian Pirkner 36:37

I'm

Michael Salmony 36:38

We

agreed on that. But Chris, what do you think should do that? I mean, you rightly have called several times we should get together and agree on something, right? Because we have an industrial policy in Europe. That is my view of why this problem has happened. But we don't want the regulator doing this. we have seen maybe some evidence that the market isn't making it happen. So who should bring this coordination about?

Christian Pirkner 37:02

I think, and again, maybe that's the personality, I love to be the free market kind of person. So the two dozen people that can make this happen, there's only that many systems in Europe. If you take the six, seven card systems and you take the 11 or now 12 mobile system, that's like one nice dinner in a closed room. I'd love to have the ECB and regulator with it because they have a role to play. They must. This is Europe, right?

And again, but if you take those 25 folks, you lock them in for three days in a skiing here in Austria in a hut. We're not leaving this until we all leave this room saying, we have a plan. We have a vision where we all win. I think that's the key thing. If we go into the saying, if you win, I lose, it's natural that folks walk out the building and saying, I'm not shutting down my thing to have your dream that might come to pass. Not doing it.

And if the regulator says, I will mandate you all to do what I do, they can mandate anything they want. They mandated PSD1, PSD2, there's so many mandates, that doesn't mean that any human being is using this stuff. So it's pointless too. And if we come to that conclusion that we create win-win-wins, and I'm 100 % sure it works because we proved that it works, then I think you can leave after two, three days and say, all right, now we have a game plan. You do this, you do that, you do that.

And by certain milestones, we start creating win-wins, very doable. And 2025 must go that direction. If we do that podcast again next year, and all we did is we noodled a bit on open banking, we noodled a bit on regulation of what a mandated digital euro could look like in theory. And then every one of us at EMPSA too, we noodle on our own ways because we want to win domestically and we don't really care about the rest. Then you're totally right.

The game will be won by the ones who hold customer journey leveraging what we are mandated to build, namely instant payment for free. Then the history, that's it.

Michael Salmony 39:01

We actually need

to come to an end, but just one last sentence from you, Chris. Who has the convening power to bring these people together? You know, if EPI says it, then maybe you won't come, if the regulator... Who is to bring these people together?

Christian Pirkner 39:15

I'll come anywhere.

It's an interesting question because it's actually amazing that it needs someone to force this dialogue because again, all of these projects have one thing in mind, namely to make it to the end to successfully win the hearts and minds of who they want to convince. So in my view, if the 20 stakeholders I mentioned, does it need anybody to force this? If so, then I guess if Europe always needs a Brussels person to force it, force it, force it on the same table and let don't let us leave.

until we have it. And I'm not so sure that there will be many no's to be frank. At least my EMPSA colleagues I know will travel anywhere. And I'm not too worried to be honest about that. the question is, can we build a vision where we all walk out and say, you know what, that was actually smart. I think this can really work. If I do my part, I will win personally, like every one of us. But the big picture will actually be

Michael Salmony 40:15

We both win together.

Christian Pirkner 40:17

a sovereign way to pay all across Europe and all across the world. I think Europe even has a shot to win this outright, to really show that this approach is actually better than existing alternatives. I'm very convinced.

Michael Salmony 40:30

Okay, super. Well, we're all fans of Europe here, so you're speaking absolutely to the converted. Let's hope we can find a Vatican council where the white smoke goes up. Unless somebody has any other questions that GPT says we should ask you.

Christian Pirkner 40:37

Sounds good, I'm all in.

Gijs Boudewijn 40:38

Ha ha.

No,

but I will ask GPT the question, Michael, because I've been saying this for a couple of years now. What is the plan and who should sit together to create that vision, to write it down and say, this is how we're going to do it.

Christian Pirkner 40:59

mean, frankly, if we

take the EMPSA members, we take Martina and her team, we take the digital euro architects, we all know the names, right? And I would love some open banking, one or two, the SPAA type, you're all sitting here. That's why I'm saying, if you have the, and we know the names, at least we four, we could now draft the list if we wanted in the next five minutes. And these 25 names are up on the drawing board. This is, we all know the same players.

Ralf Ohlhausen 41:11

Yeah, don't forget open banking, please. Yes.

Gijs Boudewijn 41:14

No.

Christian Pirkner 41:26

And then we just commit to meet in Q1 somewhere in a nice sunny European area and we lock ourselves in for Q1.

Gijs Boudewijn 41:30

you can handle

some of it and etc.

Christian Pirkner 41:33

I'm all in and I know that my colleagues at EMPSA would be all in. So you already have half the battle.

Gijs Boudewijn 41:35

Hola.

Michael Salmony 41:41

Let's hope that some of the millions who are listening to this will pick this up. I guess the idea is obviously a good one. Okay, so I think we can call it an end. Thank you very much, Chris, for subjecting yourself to all our grillings here. I think you put up a very strong defense. Lots of stuff is really to love about what you say, especially this user journey that you keep your existing user interfaces, for example, to make them work in other countries. And maybe that could be a model.

Christian Pirkner 41:44

Sounds good.

Gijs Boudewijn 41:47

Okay.

Christian Pirkner 41:53

Thanks. Love it.

Michael Salmony 42:08

and also this broader vision that maybe we all need to come together to actually make something that works for everybody. I think those are all super statements. So thank you, Chris and Ralf and Gjis, and thank you to all the listeners. And I hope you will join us for future episodes. And very good to see you here. And thank you to everybody.

Christian Pirkner 42:28

Thanks guys, it fun.