For merchants, the digital euro is a critical opportunity to transform European payments by lowering the average cost of payments, promoting innovation & competition, and offering resilience. Merchants are suffering from unilaterally imposed overly high fees, that could eventually lead to unnecessarily high consumer prices. Where merchants in most sectors have 1-4% profit margins, banks/Payment Service Providers (PSPs) have around 20-40% and for Visa/Mastercard more than 50%.
The digital euro compensation model is a euphemism for fees that will be charged to merchants to cover PSP costs, apparently not just for the acceptance side but for issuing side as well. So, let’s call it for what it is: a digital euro fee model.
The digital euro fee model must meet the Commission’s objectives of simplification, better regulation and ‘make doing business easier’. Rather than the ambiguous wording and complex provisions in the Commission’s, EU Council’s and European Parliament’s proposals, we provide our reasoning and call for a straightforward future-proof solution that meets these objectives and reflects the unique nature of the digital euro.
Otherwise, the potential of the digital euro will not be realised, and merchants will not embrace it nor promote its use.
You can read the full statement here.