Digital euro could snatch more than a third of the transactions currently done by payment cards – Politico

The European Central Bank is preparing for its new digital version of the euro to take the payments market by storm — even though much of the public is unsure it wants anything to do with it.

Internal ECB documents show the bank wants the digital euro system to be able to handle more than 50 billion transactions a year from the get-go, central bank officials told POLITICO.

Such massive capacity suggests that ECB expects the digital currency to transform the retail payments market, pressuring a key revenue stream for current payment providers: If run at maximum capacity, the digital euro could snatch more than a third of the transactions currently done by payment cards.

“The impact on savings and retail banks of the digital euro taking a big chunk of card transactions will depend on the holding limits the ECB imposes, and [on] the underlying business model of the digital currency,” said Diederik Bruggink, senior director of payments, digital finance and innovation at the European Savings and Retail Banking Group. „The higher the holding limits allowed for the digital euro and the lower the fees for payments between service providers, the worse it will be for banks„, he explained.