PAYMENTS REGULATION

Michael Salmony 0:12

Hello, my name is Michael Salmony and Ralf and Javier, we would like to welcome you to another episode of the Payments Trilogue. And today we have a very special guest who's probably one of the most influential ones in European payments that one can imagine. ⁓ From the European Commission, he's been accompanying the Commission for many years and I think the last nine years or something at least, he's been doing PSD1, PSD2, PSD3, PSD-R and

and all the other stuff. So welcome Eric Ducoulombier to our podcast.

Eric Ducoulombier 0:47

Thank you. Good afternoon.

Michael Salmony 0:49

Maybe just to kick off, ⁓ maybe you could just sort of, ⁓ you've obviously had a huge experience in regulating European payments. Before we drill down into some of the details, maybe you could just give us a bit of an overview of how you think the last 10 years, PSD1 to today went. What were the sort of highlights and lowlights from your point of view?

Eric Ducoulombier 1:14

Well, thank you. That's a very far reaching question. I ⁓ over the past 15 years, we've had a evolution of payments. The landscape has significantly changed. Everyone can see that. So what we've been trying to do with our legislation is to follow that ⁓ movement.

try to anticipate it where it was possible, but to accompany it and to make our European payments landscape as modern, innovative and competitive as possible. yeah, I think that has been ⁓ what has been driving us for all these years. ⁓ Yeah, the constant permanent willingness to get

the best possible legal framework for the best possible outcome in Europe. So that is what we've tried to do. But of course, you can tell me whether we have succeeded in doing this. But that was at least the intention.

Michael Salmony 2:27

I mean, I have a huge

respect for the commission and what you've been doing in Brussels, contrary to some of my British colleagues, I'm afraid, who think Brussels is full of bureaucrats who don't do anything useful. I have a very different opinion. I think it's extraordinary. You're trying to balance the interests of the industry and trying to bring Europe forward. And it's an incredibly complex space with sovereignty and technological developments and competition and everything. I think you're doing an enormous job, I may say that.

⁓ Not everything has gone ⁓ perfectly, maybe, and we'll we'll drill into a few of those. And maybe just one topic, if I could just ⁓ query you on that. I always miss a little bit the enforcement. You know, there's some lovely ideas about instant, about opening up APIs, about SEPA, but then to actually make sure that people do it. You know, GDPR isn't really enforced as we know, right? It's all happens. ⁓ APIs as Ralf will attest, not being enforced enough.

This enforcement topic seems to me something that is a bit underserved. Is that unfair?

Eric Ducoulombier 3:32

I mean, no, I don't think it is unfair to say that. I see exactly what you mean. And I understand the frustration. But for us, enforcement is first and foremost the business of national authorities. I mean, what we are in charge of is to make sure that the EU rules are properly transposed, properly applied. But where there is a flaw, where there is a

via a breach in the application of EU rules, it should be in the first place the responsibility of the national authorities to address this. And this is what we are trying to improve all the time. We are in constant contact with the national authorities in order to ensure that they fully play their role. We also must step up our game

with the enforcement and we are trying to do our best there, but the national authorities need to do the same. ⁓ And that is one of the things we've tried to improve in PSD3 PSR to give more responsibility, more accountability to the national authorities.

I don't want to, it's not a blame game here. I mean, I know how difficult this is and I know sometimes how understaffed they are. So I respect that. And we also have our share of the issue. But ⁓ we would like them to do more in the field of enforcement. And we are trying to give them more tools, ⁓ more tools, more...

responsibilities. This is for me indispensable, especially for open banking. I know it has been one of the ⁓ reasons for which open banking has not fully ⁓ delivered. There are many other reasons which we can discuss, but enforcement is certainly always presented as one of them.

So we heard that and we've tried in PSR to provide more safeguards, more guarantees, more provisions on enforcement because for us it is of crucial importance.

Ralf Ohlhausen 6:00

But if I could jump in right away on that very topic, because if I read correctly, then ⁓ the council position in the PSR is has been actually all the countries therefore have taken out.

Eric Ducoulombier 6:00

Thank

Ralf Ohlhausen 6:20

⁓ many of those responsibilities that you proposed that they should have for more enforcement. So that I think ⁓ the NCA's are well may not do as much as you want in wanted in your original proposal.

Eric Ducoulombier 6:42

Yeah, I believe most of these provisions have been put back, but you will see, I'm sorry, the final texts are not yet publicly available because we are still dotting the i's and crossing the t's in technical trilogue format. But for us, has been from the very beginning, it has been, we have insisted on these enforcement provisions to stay.

I know that at some stage, some of these provisions were removed. Again, and I understand, mean, these authorities, knowing that they are often under resourced, understaffed, they don't want to be exposed to possible, you know, they want to manage expectations, in other words, you know, so I can understand that. But still, we believe it is important that, especially for open banking.

but there would be some specific enforcement provisions in addition to the general enforcement provisions of the whole regulation. So my understanding is that most of what was at some point removed is back in and that is good. But of course, let's see the final text. So, yeah, it's what I can say. There is, I mean,

I mean, all member states have the same budgetary constraint. So, even if they would love to be more equipped to do a better job and enforcement, sometimes it is not easy to obtain more resources, more staff, more money. So, in fact, we face the same obstacles sometimes. So we have sympathy for that. But still, we should collectively do better.

Ralf Ohlhausen 8:41

Yeah, could I could I maybe ⁓ go more generally on the PSD2 you know, the name of our podcast, the payments trilogue reflects a bit our belief that market dialogue can often achieve more and better outcomes than regulatory prescription. So now looking back already at PSD2 so where do you think regulation succeeded versus where maybe market solutions might have worked better?

Eric Ducoulombier 8:41

Thank

Well, no, I think if you take PSD2, ⁓ I think even though ⁓ things could certainly work better, I think to large extent, open banking has been successful, maybe not as successful as you would have dreamed it to be. But think about where we were before PSD2. In some member states, in some countries, the very idea of accessing data

Javier 9:23

Okay.

Eric Ducoulombier 9:42

was not thinkable. Sometimes this ended up in courts. So we are far beyond that. This is history. ⁓

thanks to PSR and PSD3, I believe we have addressed most of the issues which had ⁓ been standing in the way of a more successful open banking, but I would still qualify it as a success of regulation.

I would also qualify, I would also describe as a success the fraud prevention in PSD2, SCA. SCA for me is definitely a success. When you look at the figures before SCA and since SCA, you can see the progress. So again, we should not be complacent. More should be done and SCA was only addressing

what we knew about fraud at the time. And what we are all aware of is that fraud has transformed itself. And so SCA is an important tool, but has to be now completed, complemented with further instruments to combat fraud. And that's exactly what we've been trying to do with PSD3 and PSR. So...

we have to be constantly evolving ⁓ following the development in the marketplace. Unfortunately, the pace of the market is sometimes much faster than the pace with which we legislate. That's the way it is. So I think PSD2 has been successful. We have in our PSD2 review, which we published a few years ago,

We explained what we believe worked well and what worked less well. But I think by and large, PSD2 has been successful. I know that there is a perception in the marketplace that self-regulation or sometimes co-regulation, but self-regulation could have yielded better outcomes. Maybe we will never know. But what I can see is that attempts like the SPAA, which is a pure self-regulatory initiative,

Javier 11:38

.

Eric Ducoulombier 12:02

has not been hugely successful so

far, which in a way confirms the importance of doing it ⁓ the classical way, which is with legislation. Of course, with living space, room for self-regulation. That's exactly what our ideal vision is, a bedrock of... ⁓

robust, innovative, competitive, legal rules enshrined in EU law. And on top of that, in the more commercial space, a self-regulatory environment. So far, it hasn't really fully worked. I'm sure it will in future, because that's the future precisely. So yeah, I'm quite optimistic.

Javier 12:50

⁓

You know Eric, I believe I am an advocate of free market, but I wouldn't say that what we have achieved could have been done with the market alone, spontaneously. If we look 25 years ago, the obstacles we were facing couldn't have been overcome just by the market. I think it's

It's both the market and regulators working together what can help European society to really achieve our goals. If I could summarize the largest topics, the most important topics we have been dealing with in the last 25 years, I would say we started with integration. Integration was the big word, the big theme that we needed to face because we were aiming to create a single market.

And that was the big word. think that has been more or less achieved. So I would, would claim this has been a success. It took more time than we all wished, but I think that has been done. Second, ⁓ I think there were some feelings some, some years later about lacking competition in European PSPs, but then it was realized that it was not competition. was competitiveness.

vis-a-vis the rest of the world, which was the real issue. Then we entered into the phase of talking about innovation. we have also there, particularly in innovation, we have proven the world that we can be innovative in Europe. So that has also, I would say, been achieved in good manners. The last topic to me is this big word about sovereignty. I am optimistic.

I really see a lot of friction with that topic and those discussions, but I am optimistic. I think that in two, three years, that will not be a real obstacle and that we will achieve enough sovereignty in European payments. So my question to you is what comes next? What is the next big topic that we should be addressing? And I would also suggest that we address it.

from a common stance in between the regulators and the private sector. What would be in your view the next big thing that we will need to analyze and to discuss and to debate and to put forward solutions to whatever would require those solutions?

Eric Ducoulombier 15:16

Yeah.

Yes, I think what we've been very successful about is to create infrastructures. We have extremely ⁓ modern state-of-the-art rails, infrastructures for payments in Europe. We have also state-of-the-art regulations, rule books for payments. We have excellent domestic

payment instruments, most of them now being based on mobile payments, all of them based on instant payment. But I think it is fair to say that to a large extent, excellent means of payment work mostly domestically. So I think the next frontier should be in order to address the sovereignty issue that you mentioned, Javier.

The next frontier should be to have pan-European, home-grown, EU-born payment instruments ⁓ that work ⁓ domestically but cross-border for all payment use cases. E-commerce, point of sale, peer-to-peer, and probably the holy grail is to have such means of payment.

⁓ at point of sale. This is perhaps the still the missing brick. ⁓ Instant payment at POI, at POS. This is perhaps the missing brick. And as you all know, there is work underway on this. And open banking, of course, could be an important contributor to this debate. So we have been...

very happy to see the emergence of initiatives in the past years. These are very good. We've been frustrated for decades of not having such initiatives or when they were ⁓ initiated, they quickly disappeared because they failed. So now all the planets are aligned and I would say they are more aligned than ever before. And everyone understands now the importance.

of payments. This is perhaps my only claim to fame. And again, and I don't want to be, you know, ⁓ claiming that it was my my own contribution, but I've probably played a role in bringing payments to the top of this political ladder helped by the geopolitical environment. One could say, unfortunately, because it's not a good geopolitical environment.

But still it has helped bringing payments where it should have always been at the top of the political ladder. And now it is and it will ⁓ not leave ⁓ from there, I'm sure. So ⁓ that's why I think, yeah, the last border or the last mile, which might not be the easiest, will be to bring European means of payment. ⁓

out there ⁓ in the market domestically cross-border. And yeah, I'm quite optimistic because I see a lot of movement. Of course, there are many initiatives public and private. And one of our challenges is going to be to make all these initiatives coherent between themselves, consistent coherent between themselves. Because the last thing we want is to introduce more fragmentation than there is

already in the market. So, and that's what is keeping me busy most of the time is to secure, to ensure this consistency between all these initiatives. Digital Euro, wero, EuroPA, these are great initiatives, but what we want to avoid is cross, is friendly fire or cross firing between these initiatives. And that's, that's a top priority, I would say for all policy makers.

Michael Salmony 19:48

I like very much what you say, Eric, about the harmonization of the payments layer and getting the rails smoother and more connected. That makes a lot of sense. But the Americans would say that is the failing that Europe always falls for. We always concentrate on the rails and on the lower layers and not on the value added services on top. You know, the Americans have a terrible payment infrastructure, but they have created PayPal, which hides the ⁓

differences underneath there and that's become a global success. And I see that in other areas. I used to work in the IT domain and I know DG Connect is always obsessed with putting fibers in the ground, not so much on what digital services one could develop. It's all about the bottom layer. Is that a fair critique or is that, or would you also think that maybe Europe should focus more on the value added services on top, which is where the real value is generated?

rather than only on the infrastructure.

Eric Ducoulombier 20:50

don't think you can have one without the other. think you cannot have fast cars.

driving on lousy roads. You need to secure these rails, these infrastructures as the basic layer.

Michael Salmony 21:11

Sorry,

I just disagree with you on that one because that is surely what the Americans have demonstrated. They have a lousy infrastructure, right? I mean, there are some banks where you do online, where you think you're doing online banking and sending money from one bank to another, but actually in the back office, they print a check and send that check by post to the receiving bank. That even exists to this day in America. So that they have all sorts of...

really lumpy and unconnected and very poor interest, they're fantastic at building layered value added services on top. And I just cited PayPal and there are plenty of others which have become global successes. Now we're seeing stable coins, which is another American thing that is conquering the world. Isn't there something to be said that we're focusing too much on the rails, thinking that's what we have to do and thereby maybe neglecting a little bit the things that can make us global champions?

Eric Ducoulombier 22:05

I mean, I see what you mean, but I'm an EU official, I'm a commission official. We are not here. Our business is not to design added value instruments or services. I mean, this is the responsibility of industry, would say. Our responsibility was to promote, build, finance the infrastructures and ensure ⁓ a coherent...

rulebook in the form of robust EU legislation. Now, on the basis of all this, we rely very much on industry to design these fast cars, as I mentioned. I'm not saying we are

I'm not saying we, I mean, we we would not have the competence to design. This is not, we are not in the business of designing payment instruments in the, in in the EU commission or the EU institutions. This is very much the responsibility of industry and this is what they are doing. So in a way that's, that's, ⁓ I see what you mean and I probably agree with you. But even if I wanted to design these value added services and payment instruments.

I don't think I would have been able to do that. This is really a responsibility of industry. ⁓

Ralf Ohlhausen 23:35

Well, if I may, because I mean, you are running an expert group, which I have the honor to be part of the payment system market systems expert group, where we've just done a project looking exactly at the obstacles for bringing instant payments to the POS, physical retail sale, the holy grail of retail payments. And

you have, so not only you are entertaining and sharing that expert group, so you're consulting the market, which is great. So we come up with recommendations. And now there are many of them. But I think there is a common theme a bit that I think the whole group is believes in less regulation and more orchestration. So where we what we're missing is ⁓

someone to convene ⁓ the different market holders, stakeholders, and we, I think we discussed this before in our podcast here as well, more orchestration, less regulation. And do you see a chance for that, that FISMA is moving a bit more or taking that role up and sort of scaling down on a regulation and scaling up on the orchestration being the convener?

Eric Ducoulombier 25:01

Well, ⁓

We are already, I mean, we are not doing a lot of regulation. I don't think we have been, I mean, we've done the regulations that we considered were indispensable to create this competitive, innovative ⁓ landscape. But we don't, we are not in the business of regulating everything that moves. I mean, we want the market to not to be, you know, not to be constrained by regulation. But I see, I see your point about orchestration.

with, I mean, we have already some organizations that do that. We have the ERPB and you know that. And the ERPB's ambition a few years ago was precisely to be this, ⁓ know, this chef d'orchestre, you know, this orchestrator that you have in mind. And the ERPB is very much run jointly by the ECB and the commission.

⁓ And I think most of what we have achieved in the past years, I'm thinking about instant payment, for example, came from ERPB recommendations. So, ⁓ I mean, I'm certainly open to exploring ways of improving it with the ECB. I'm sure the ECB would be equally open to improve it. But I mean,

Yeah, I mean, this is what we have. FISMA, mean, our DG, the commission, plays a driving role there. You have, I I fully appreciate the fact that the market sometimes considers that there should be this, know, this someone, something, an organization in a way pulling the strings and orchestrating the whole. I don't know whether we, that's exactly what

what should be done. that would be, wouldn't it be a bit too top down? mean, this is not how we normally work in the EU. But again, point well taken. I've read exactly the report that you alluded to. And let's see if in coming months, or years, but maybe months, let's see if improvements can be brought. I would really encourage you all.

to bring this to the attention of, you know, at the highest level, both at the ECB and at the commission. If you believe there is more, a great design needs a great designer. Well, if you think there is more of that is needed, then of course bring this to the attention of, you know, of the highest level. For me, things work reasonably well.

But okay, again, I don't want to be complacent. They can certainly work well. And if you see they should work better, you certainly have good reasons to say that. So let's see if in the coming years this can be done.

Javier 28:18

So, a re-clicking.

Ralf Ohlhausen 28:18

Yeah, and thanks.

Thankfully, you agreed to publish this report. So we'll link it underneath the video there for everyone to have a look at these recommendations. That's great. Sorry, Javier, you wanted to?

Javier 28:31

No, yeah, I just

wanted to point out that I do disagree with Michael in what I consider to be an unfair critique to the European efforts because the two situations 25 years ago were completely different. In Europe, we were aiming to create the single market coming from well-developed domestic markets. That was not the case in America.

And I think the only way to bring together all those domestic markets and to create the eurozone, single market and all that was by focusing on infrastructures and the very basics, standards, business rules. That I think is the only way to face the problem of fragmentation that we were suffering 25 years ago. That I would say America is not the right model or the United States is not the right model.

to apply to Europe in my view. That's a, and I usually don't disagree with Michael, but this time I wanted to point that out. But I also disagree with you that ⁓ the pan-European solutions are a matter of the market because that would be the case if the market is absolutely sovereign also to do what the market wants to do, but it is very much constrained by the other.

factors affecting the market. And I do think I do really believe that regulation influences a lot. I think that, for instance, in 2025, we have been witnessing that nothing has happened but VOP and instant payments. And this is not that PSPs didn't want to pursue open banking. It is that they had priorities and the priorities were detected by regulation. And even the fact, I think you should also acknowledge

that even the fact of an announcement in regulation paralyzes the market. That there will be a PSR or a PSD3 just paralyzes the market because it creates such diffused expectations that nobody will do anything until that regulation is materialized and it is made clear to what are the implications. And I think we have been suffering

from this kind of paralysis being provoked by regulation and the announcement of new regulation. And it is not fair also to blame the market for not having been able to develop solutions because they were demanded to do different things, which I could agree they were necessary, but then it is not fair to say the market has not been ⁓ successful in developing ⁓ solutions, pan-European solutions.

⁓ at the POS, for instance, that we are all ⁓ wishing to have. because there are many other factors influencing the market. And I think probably we need, and that's why I think that we need to have a more effective communication in between both sectors to really agree in what needs to be done to achieve agreed goals. But I think that's the right dynamic.

get coming closer in between the two sectors. And I don't know what you think about it.

Eric Ducoulombier 31:54

No, I again, I see your point, but I mean, if you take instant payment, we calculated with my colleagues that if we had not ⁓ regulated instant payment or making them mandatory, it would have taken the market another decade, more than 10 years to arrive where we thought the market should arrive. So the way we had

to nudge the market to go faster. But at the same time, we fully understood what were the obstacles for the market not to have developed instant payment as ambitiously as we had hoped. we've tried to address these issues in our regulation, about sanctions, about pricing, about the risk of fraud.

all these topics we understood that they were linked and indispensable for instant payments to be developed. yeah, so we again, we are not obsessed with regulation and I take your point that regulation has a freezing effect. ⁓ But I mean, sometimes things were frozen even before we announced any regulation. So, yeah, I don't think we have

made it worse. But I'm open to the critics and I fully agree that regulation is not always the ideal solution. For me, regulation is a last resort solution when everything else has failed and only for those issues which need to be covered by regulation. And that's what I've tried to do with instant payment regulation, which is one of the shortest.

regulation of the past decades, just a few articles adopted within one year. So I get we got it right there. And that's also what we've tried to do with PSD/PSR. And yeah, so that's what I can say on regulation. Last, must be last resort.

Michael Salmony 34:01

Hmm.

Ralf Ohlhausen 34:12

Yeah, but the PSR, PSD3 PSR is coming to an end very soon, I think now. And well, I know that you probably can't talk much about it, but is there anything that you can say about what we're getting or what we're not getting? And when it comes to the end, indeed.

Eric Ducoulombier 34:33

Yeah, just a few words maybe about the timeline. So the political discussions were finished shortly before Christmas 2025. And now the teams, the teams of the Commission, Council and Parliament are, as I said before, trying to dot the i's and cross the t's at technical level, but there are no longer any political discussions. So by and large, the texts are stable.

⁓ difficult to summarize them in a few words, but I think ⁓ these new rules ⁓ will be quite ⁓ new and innovative as regards fraud. ⁓ think the number one priority in PSR was to prevent or to beef up our panoply.

against payment fraud, which since PSD2 has become, everyone knows that, has become really a plague. So we've put the emphasis on combating fraud and as a priority on improving the prevention against fraud. In an ideal world, fraud should be prevented. People should detect when they are about to fall victim of a fraud.

So it's, I mean, we've tried to come up with a lot of new provisions on data sharing, on awareness raising, on transaction freezing, ⁓ these and also in giving ⁓ some obligations to the ⁓ online platforms and search engines, which also now, as everyone knows, have their own share.

of the fraud ⁓ situation. Fraud prevention is the number one, I would say, hopefully, success of this new text. And also we've introduced with the co-legislators,

new provisions on liability, who should pay the bill when fraud has taken place in spite of prevention. And here too, we have been quite ⁓ innovative in the sense that we have also associated the online platforms and search engines to, in some situations, participate to the liability, to the financial liability when a fraud occurs.

of course, in full ⁓ respect of other rules like the Digital Services Act. And this is very new. ⁓ And also some situations will be also reimbursed, refunded, like whenever there is a bank impersonation fraud, where people's, the consumer's level of vigilance is certainly very, very low because they have, they believe that... ⁓

whoever is contacting them is indeed their bank. So this is probably the number one new set of rules that you can expect ⁓ to find in PSR. Also, and I know it is of interest to you, Ralf, also open banking. As I said before, we've really tried to look at open banking because we have a lot of faith in open banking to be a powerful driver of competition and innovation.

So we've tried to see where things can be improved, address the obstacles to open banking, address the enforcement to open banking, address what should be an optimal baseline open banking service. So this is what we've tried to improve. Of course, I'm sure you will have your views and your colleagues as well, but I mean, we've done that with the very best intentions in the world. Of course, takes two to tango.

even three here because we've had to discuss all this with Parliament and Council and the outcome is of course the fruit of discussions and therefore of compromises. But I do believe that the final outcome will be robust on open banking. So yeah, and I don't want to continue this review of the future provisions. You will see them soon. But I think, yeah, I think

I'm quite happy about PSR PSD3. Of course, it is a negotiation you give, you take. It's inevitable. You can't have all your wishes satisfied in a negotiation. But I think it will stand the test of time. Of course, one day there might be a PSR2, PSD4. We shall see. But for the years to come, it will be a good.

set of rules on which we expect our industry to thrive in this new competitive and innovative world. So this is the mission we had and I think to a large extent our mission is accomplished. But again, in due course, I will of course want to have your feedback when the final texts are more widely available. Thank you.

Michael Salmony 40:12

I I love what you say about fraud. mean, that to me is one of the riders of the apocalypse, right? If we don't get that right, then everything is scuppered, right? We can make us lovely rails and lovely weros and whatever. If we don't get a handle on fraud and the things that you mentioned, like the banks could share data amongst each other to be alerted early to tie in other industries like the telcos cannot support that people call you with a fake number.

the social media industry, so looking even beyond banking, those all sound really excellent things. However, there are three riders of the apocalypse and we haven't really talked about the two others, which in my view are the ones that are most exciting in the future, and that's AI and stable coins. If we don't get those right, then things can go really badly wrong. Stable coins could be entirely US driven with Circle and Tether and only US dominated stable coins and AI, we all know what

not only what opportunities, but also what risks they entail. Maybe you could say a little bit about the other two riders of the apocalypse, how you're going to be dealing with that in future.

Eric Ducoulombier 41:22

Yeah, well, thank you. Let's start with stable coins. ⁓ As you will observe, the fact that the very large majority of stable coins which are issued today are issued in US dollars. ⁓ But we have also seen in the past weeks and months ⁓ announcement about

European banks launching their own stable coins, some of them in US dollars, but some of them in euros. So, I mean, there is no fatality here. we have, again, back to rules and rule books and infrastructures, have a very good legal framework, which is MiCAR. Everyone says...

in the stable coins, the cryptos industry say that MiCAR is a good legal basis to ⁓ issue stable coins on, although MiCAR was written a few years ago. again, ⁓ I believe the ball is in industry's court. ⁓ And if they believe, if they believe there are remaining obstacles or there are things in MiCAR,

that must be improved for them to thrive in the EU and issue European stablecoins, then they should tell us, are going in 2026, well this year, we are going to have consultations about MiCAR. Because we are fully aware of the fact that MiCAR was written a few years ago and few years ago in that domain can be very, very long time.

So we want to be sure that ⁓ MiCAR still fully stands. And we have seen, of course, since emerging in the meantime, like multi-issuance of stable coins, know, stable coins issued in one jurisdiction and perhaps circulating elsewhere and being potentially redeemed in other jurisdictions. So we believe MiCAR is addressing that already. But if MiCAR can be improved, we are absolutely

⁓ open to hearing people's views and ideas there. So ⁓ we are quite supportive of stablecoins in DG FISMA. It is not my immediate field of responsibility, at least not as head of unit, but I can tell you that those who are in charge of that have strong wishes and expectations as regards stablecoins. So we would...

very much hope that they also in Europe become part of this new ecosystem that we want to see emerging. On AI, we...

We would like AI to be much more used in the field of payments by the good guys to talk like someone else, the good guys and the bad guys. So we would like AI not to be only used by bad guys in order to facilitate their evil ⁓ designs, especially in the field of fraud. We would very much hope that AI would be also fully used by the banks.

by everyone in order to beef up their own panoply of tools to ⁓ do a better transaction monitoring, to be a better know your customer, to do a better job in detecting fraud before it is too late. And AI can be of huge impact there. And again, we see no reason why AI should only exclusively be a tool used

to do evil things. ⁓ we are extremely supportive of everything that AI can bring. ⁓ It is, for me, extremely powerful to prevent fraud. ⁓ very effective fraud prevention panoply ⁓ is definitely based on a better transaction monitoring.

on better capacity to detect at the earliest stage possible. And AI can do that. So we've tried to lift all the obstacles. You mentioned GDPR before, Michael. We've tried to lift the obstacles without, of course, rolling back on GDPR, which is a fundamental piece of law. But we've tried to see how it can be accommodated. For example, to enable PSPs to share data.

between themselves data which can be of course originated by AI initially. we've tried to make AI be ⁓ more used in payments for good things. this is, yeah, let's see, but we are extremely supportive and extremely confident that AI will be an extremely powerful tool, not only for fraud also to design.

⁓ to design ⁓ better rules and maybe to design better instruments in the future. So yeah, that's what I would say.

Michael Salmony 47:12

Excellent. Thank you.

Ralf Ohlhausen 47:16

I maybe if I could also mention something which is I think dear to me that I think the FinTech industry, TPPs also in specifically but I think the whole FinTech industry has a lot to thank you for in driving not just you but your team and then actually FISMA in general to ⁓

strive to do your best in driving more innovation and competition. And ⁓ with PSD2 now also with what you put on a table with PSR and ⁓ my view of the last few years is that it was ⁓ sometimes the parliament and always the council.

who's been pushing back, who's been for me the culprit of not moving forward. ⁓ So we've had a lot of that now. I think your PSR proposal was close to very good. I wouldn't say perfect, of course, but anyway, ⁓ it was, and it's definitely the best of the three on the table. So even the parliament in this case, unfortunately,

has sort of scaled down on open banking and the council big time. So we will end up with a compromise here, which is very much shaped by the council and is missing big opportunities, unfortunately, and I think very similar in other areas. And now there is a new case just coming on the table now with the council making their proposal on the digital euro.

⁓ where they try to exclude it from open banking. So basically get around so they don't like open banking. So okay, we'll, just define shouldn't apply. I mean, for me, this is absolutely outrageous what the council is doing over the last few years, actually, and it's actually getting worse in...

Javier 49:09

. .

Ralf Ohlhausen 49:30

for some strange reason, maybe it's bank lobby, I don't know, but for some strange

reason here to really drive against competition innovation, very unfortunate. But yeah, well, as I said, so it's not your fault to the contrary, I think we have had ⁓ the FISMA always on the side of more competition and innovation. actually, this rant was just there to actually thank you for that.

Eric Ducoulombier 49:57

Thank you, thank you, you. I can only ⁓ confirm that we are very much in commission in my team in FISMA. are very much ⁓ seeking maximum outcomes in terms of competition, ⁓ innovation. We've always enjoyed discussing with you, Ralf, with TPPs, with your members.

Javier 50:04

Okay.

Eric Ducoulombier 50:27

with your industry, has always been a source of inspiration. Now, of course, I'm not going to comment on your judgment about other institutions. I'm not in a position to do that. That being said, I think you are a bit too pessimistic. I think the final outcome is certainly more balanced than what you described. And be patient when you will see the final texts.

But again, mean, we are, this is Europe, this is a democracy here, and it is normal that the parliament and the council play fully their role. And we also play fully ours, and that's how this functions. And I think this is good. It is good. It normally produces good outcomes and balanced outcomes. I'm convinced that we...

We got a good outcome here, but okay, we shall see. We shall see in future, we'll tell, definitely. Yeah.

Javier 51:34

I would like

also to underline and stress my gratitude and congratulations to you for two reasons, Eric. First, ⁓ I would say that many things could have been done better, for sure, and there are many things to correct or to fine-tune, but overall, after 25 years, I think we have made a huge progress. So I couldn't say it has outstanding, but it has been a remarkable...

⁓ progress made in this quarter of a century. And we have proven, and this is something you I would say, you have been very instrumental to that, we have proven that when we talk in between the public sector and the private sector, things can be done. And that now is a fact, something that we can acknowledge. If we agree on something, we can achieve it. And I think in the last years, ⁓

things changed coming from the commission. And I think people like you have created a much better environment to nurture trust and to create a, I would say, kindly environment or a kind environment so that discussions could be held ⁓ with frankness and openness and that we still need to do things in that respect.

So my question to you is, what would you advise us to do for the future to create a better level of trust in between the two sectors and bring together the different views and address the issues which you have mentioned, many of them, to address them in a more effective way with, as I said, a higher level of trust and...

an agreement.

Eric Ducoulombier 53:32

Yeah. Well, first of all, I would agree with you that what we have achieved in the past 25 years is very impressive. And I don't want to claim any ownership of this success. I think what take SEPA, for example, SEPA is a great success and SEPA is still hugely attractive. Look.

Look at the number of countries that want to join the geographical scope of SEPA schemes. We have now, I think, 41 countries and there are still some countries in the queue. Look at instant payment, look at SCA. So we have been in a way, we have inspired other jurisdictions in the world. I know that. this is, of course, something we can be proud of. I sometimes in Europe, we...

We think we should be more often proud about our achievements. And especially when we discuss with other jurisdictions, we can see that a lot of them have found a lot of inspirations here. Maybe they have done better at doing it, because we are 27 countries and things are more difficult for us.

But okay, so we should never hesitate to take the pride that we deserve in Europe collectively. Now, what would be my advice to have more trust? I think, well, maybe I'm too optimistic, but I think the level of trust between public and private is still high. ⁓ I think what we need to do as public authorities

is to explain a bit more about the coherence. I started almost half an hour ago about this coherence and consistency. Sometimes what we see does not always appear to be coordinated or to be coherent. This coherence was the idea behind the retail payment strategy that we adopted in September 2020, where

Michael Salmony 55:45

you

Eric Ducoulombier 55:57

where we are quite keen on explaining what we were going to do and why, what was our vision and what we wanted to achieve. And to a large extent, we've done exactly that. Now, perhaps we've reached the end of this cycle, which was covered by the current retail payment strategy. Maybe it would be time for us to come up with a new form of

blueprint, a new form of vision, because things have changed. And you mentioned before, Michael, AI, mentioned stable coins. All these new developments, which deeply impact payments, they might warrant the design of a new form of strategy, be it a brand new strategy or revised form of our existing strategy.

And of course, we would have to do that in full cooperation, in good intelligence with all of you, with the market players. Of course, with other players in the public sphere, thinking about the ECB, but also with the private sector. And I think in payments, we have a unique ⁓ framework with a high level of partnership between private and public.

organizations like the EPC, which, Javier, you know very well, which are, I don't, I can't think of any equivalent of the EPC in other sectors. I don't think of any such organization as well. So it works well. It can certainly work better. And the level of trust, the level of trust, I think, would be greatly improved by us explaining better.

the ground design, the ground coherence of our actions. And we have seen that notably in the recent times with the digital euro, where many in the market don't understand why we are at the same time promoting a public form of sovereign payment instruments, while at the same time promoting and supporting their private equivalent, like wero and

EuroPA, EPI and others. for us, for me, there is no inconsistency. There is room for both. But maybe we should be better at explaining it. What is the room that we see for private? What is the room that we see for the public in the ecosystem? ⁓ And yeah, we could probably do better there. ⁓ And that would certainly improve the trust between public and private.

Now the trust within the private sphere, then maybe you are better placed than me to know what to do. We've tried definitely in the commission and I'm very grateful that you say that, Javier, because that was one of my obsessions to try to in a way pacify the marketplace, which when I arrived six years ago for the third time in this...

domain of payments for the third time in my career, when I arrived, I saw a lot of distrust between several components of the industry. And one of my first initiatives was to have them all around the table and try to discuss and see what was the issues and try to have, know, gentleman's agreement at least, you between all these components of industry. And to a large extent, I think what we see now, and again, I don't...

want to claim any part of this success, but I see a much more ⁓ pacified and ⁓ organized industry. But again, things can work better. ⁓ And I'm sure my successors, because I'm going to retire in a few months, I'm sure my successors will identify this as their priority.

⁓ to make things work even better between private and public authorities and also within the private sector to the extent we can of course. We have to manage expectations, cannot, we are only the commission, we can try to improve things but of course always within the limit of our responsibilities.

Michael Salmony 1:00:44

Well, thank you so much for that, Eric, and also for drawing the curtain on your retirement. We much look forward to working also with your successor. I think it's been clear from our discussion, we've asked some pretty probing questions. I hope they weren't considered too impolite and too rude, but I think you also heard our respect from all of us of all the work that you've done over the time, and that's really much appreciated.

Okay, I think it's time to bring an end because we've massively overstayed what we usually do. But thank you, Eric, for taking the time to talk with us. It's been very revealing. You're clearly a skilled negotiator and it's a pleasure having you with us today in our trilogue and wish you all success in your trilogue in the future. Thank you very much.

Eric Ducoulombier 1:01:34

My pleasure. See you very soon. Bye for now. Thank you, Xavier. Thank you.

Michael Salmony 1:01:37

Thank you.

Javier 1:01:37

Thank you

very much and best wishes.

Ralf Ohlhausen 1:01:41

Yeah, for me. It was a pleasure working with you for the years. Thank you.

Eric Ducoulombier 1:01:43

Thank you. Thank you.

Same from me.