ECB signs standards deals for digital euro

The European Central Bank signed agreements with the European Card Payment Cooperation, Nexo and the Berlin Group to reuse existing open payment standards for digital euro transactions. The deals cover contactless tap-to-pay, merchant-to-payment-provider connections and alias-based payments such as those using a mobile phone number.

The ECB expects reuse of established open standards to reduce the technical work required of banks, merchants and payment service providers and to encourage compatible implementations across terminals and providers.

An earlier ECB analysis estimated EU banks could face between €4 billion and €6 billion over four years to prepare for a digital euro, reflecting systems updates, staff training and compliance costs. The central bank describes the agreements as a cost-mitigation measure rather than a guarantee of low implementation expense.

On March 25, Executive Board member Piero Cipollone announced the ECB expects to publish key technical standards by the summer. The bank is recruiting payment service providers for a 12-month pilot scheduled to begin in the second half of 2027. The pilot will involve a limited number of PSPs, merchants and Eurosystem staff and will place PSPs at the center of digital euro distribution.

Market participants will be able to adopt the agreed standards for tap-to-pay functionality and payment routing between merchants and providers, reducing the need to create custom interfaces for a new central bank digital currency. The approach aims to limit fragmentation and lower barriers to interoperability across national markets in the euro area.

The agreements do not remove broader operational and compliance costs. Banks may still need to upgrade back-office systems, train staff and expand anti-money-laundering controls. Merchants and payment service providers will need to update terminals, software and integration workflows even if open standards are reused.

The ECB said the standardization work follows earlier efforts to clarify technical requirements so industry participants can begin preparing systems. Final cost effects will depend on detailed implementation choices and the level of market adoption.