ECB policymaker Yves Mersch, whose purview includes payment services, has called on Europe to develop its own global card payment services to compete against international rivals and to safeguard against growing geopolitical tensions.
While companies like PayPal Holdings Inc., Apple Inc., Amazon.com Inc. and Facebook Inc. are dominating online payments globally, European payment services like Germany's Girocard and France's Groupement des Cartes Bancaires are too focused on the national scale, Mersch noted, adding that even Chinese giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd. are advancing.
"Our reliance on non-European card schemes for domestic payments in Europe is suboptimal," he said in a speech in Paris on Sept. 3, adding that he is worried international giants will increase their presence through their network power.
"We have to be mindful of the fact that extraterritorial jurisdiction could, in a worst-case scenario, affect the operation of those companies and disrupt payments between European counterparties," Mersch said, adding that "in the current geopolitical environment, such risks are, unfortunately, not as remote as they once were, and need to be taken seriously by European policymakers."
Mersch added that European banks seem to have "surrendered" much of the pan-European payments business to multinational rivals.
The ECB policymaker, however, added that although the EU should tackle its lack of pan-European card payment services, it should not turn to protectionism in a bid to "artificially" promote its own providers.