Fabio Panetta: The two sides of the (stable)coin

Speech by Mr Fabio Panetta, Member of the Executive Board of the European Central Bank, at Il Salone dei Pagamenti 2020, Frankfurt am Main, 4 November 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
04 November 2020

The payments industry is undergoing a digital transformation, and this transformation is accelerating. We can now pay with cards that are stored in our mobile wallets, ready for a transaction to be initiated at the touch of a button. Mobile payment apps allow us to easily pay or send money to friends. New services based on application programming interfaces, such as payment initiation services, are expanding consumers' choice of e-commerce payments.

Fintechs have sparked the latest wave of innovation. In a recent survey by the European System of Central Banks, over 200 new payment solutions were reported, of which more than one-third were provided by start-ups.

New providers have progressively shifted their business models from fee-based to data-driven, where payment services are provided free of charge in exchange for personal data that offer deep insights into users' preferences.

The global technology firms - the so-called big techs - are using this model to leverage their large customer base and expand in global markets. Thanks to their global footprint, they are uniquely positioned to offer services in the area of global cross-border transactions, where current solutions are low quality and expensive.