According to the Dutch central bank director Olaf Sleijpen ‘Strategic autonomy in retail payments means there also needs to be a European option, where Europe can independently manage its payments ecosystem‘. Read his speech for the annual conference of the European Payment Institutions Federation (EPIF).

Among other things, he said:

Because there is an elephant here, and it’s called strategic autonomy.

Over the past years, the world has changed dramatically. Rivalry between the big economic blocs has increased. And there is a major war raging on the European continent that has heightened international political tensions. Geopolitical tensions that translate into economic fragmentation and protectionism. Of all the major economies, Europe is the most exposed to these shifts. Remember our dependence on Russian gas at the outbreak of the war in Ukraine. Likewise, we import over 80% of our digital technology. Personally I find navigation an impressive example. All the navigation equipment in Europe uses GPS infrastructure which is run by the US army. Without GPS, Google Maps or the navigation in your car is completely useless.

There are many more examples where Europe is heavily dependent on the policies of other countries for the provision of strategic goods and services. In the current political climate, it is understandable that European governments see this dependence as a strategic vulnerability that needs addressing. That’s why strategic autonomy is a priority for the European Commission. It also featured prominently in the speech by Mario Draghi when he presented his report on the future of European competitiveness. Europe is serious about this.

Strategic vulnerability is also an issue in the European retail payments market. Like gas, electricity, and for that matter navigation, the payments infrastructure is a critical infrastructure that is considered a backbone of the economy. At the same time we see that the payments infrastructure is heavily dependent on products and services of globally active payment services providers that are not governed within the EU. Your membership list confirms this.

Although these companies are regulated by EU frameworks, the policies of foreign governments can still result in control over what, how, and to whom European citizens and businesses can pay. A well-known example is Wikileaks. Presumably after a phone call from the White House, Mastercard and Visa announced that they would stop all payments to Wikileaks. Whatever your opinion of Wikileaks is, the issue here is that in Europe we want to decide for ourselves whether payments to merchants and organisations should be allowed or not. And we do not want our payment system to be dependent on the policies of foreign governments. (…)

Strategic autonomy in retail payments means there also needs to be a European option, where Europe can independently manage its payments ecosystem. This involves creating a secure payment infrastructure, using home-grown pan-EU payments solutions, and developing regulations to ensure system safety and efficiency.

This approach is reflected in the Eurosystem’s policies. First of all, we are developing a digital euro. I am happy to see you will be discussing this in more detail later this morning. We envisage that the distribution and acquisition of this European payment instrument will be open to private payment service providers. Second, we aim to reduce major dependencies on non-EU parties by supporting pan-European initiatives such as the European Payments Initiative. And third, the EU’s geopolitical trading power will be enhanced by linking TIPS with various regional payment systems, such as those of the Nordics.

Cybersecurity is another topic of the speech:

Today, a quarter of cyber-attacks worldwide affect the financial sector. These can be direct attacks on financial institutions – including payment service providers – or indirect threats via external parties that financial institutions depend on. For example, an attack on a third party – such as a telecom provider or a cloud provider could disrupt the services of one or more payment service providers, affecting the payment system. In addition, a large-scale disruption of payment services can damage confidence in the payments system as a whole.

European payment autonomy was also mentioned in the 2023 annual report of the Maatschappelijk Overleg Betalingsverkeer (MOB), machinetranslation [*]:

Also in 2023, the MOB followed the progress of “European Payments Initiative” (EPI). The MOB sees this market initiative as an important step towards a comprehensive pan-European and instant payments-based payment solution. In addition, the MOB discussed the actions initiated by the European Commission, European Central Bank (ECB), Euro Retail Payments Board (ERPB) and/or European Payments Council (EPC) for the future European payments system. Important driver behind those actions is the desire to reduce dependence on non-European parties such as Mastercard and Visa and the big techs in European payments.

Olaf Sleijpen is one of many top Dutch financial executives active in Europe and around the world. Articles mentioning these top executives you find here.

[*] The Dutch original: “Ook in 2023 volgde het MOB de voortgang van “European Payments Initiative” (EPI). Het MOB beschouwt dit marktinitiatief als een belangrijke stap naar een alomvattende pan-Europese en op instant paymentsgebaseerde betaaloplossing. Daarnaast besprak het MOB de door de Europese Commissie, Europese Centrale Bank (ECB), Euro Retail Payments Board (ERPB) en/of European Payments Council (EPC) in gang gezette acties ten behoeve van het toekomstige Europese betalingsverkeer. Belangrijke drijfveer achter die acties is de wens om de afhankelijkheid van niet-Europese partijen als Mastercard en Visa en de bigtechs in het Europese betalingsverkeer te verminderen.“