The Block: Europe aims to set up an instant payment system to taper off US players’ dominance

Europe is planning to build an improved instant payment system to taper off U.S. payment giants’ dominance across the continent.

European Commission vice president Valdis Dombrovskis said at a conference on Tuesday, as reported by Reuters, that his team is planning to launch the pan-European system by the end of 2021.

“By that time, everyone in the EU, people and companies, should be able to carry out domestic and cross border instant payment transactions in all payment situations” via banks, said Dombrovskis.

Europe already has an instant payment system called TIPS [Target Instant Payment Settlement], but banks have reportedly been slow to join and it has not had a significant impact so far.

Speaking at the same conference, European Central Bank board member Benoit Coeure said that Europe must overcome its dependence on international payment providers, such as Visa, MasterCard, Amazon, Apple, and PayPal - all of them based in the U.S.

“Europe is at risk of losing its economic edge. Country-specific solutions lack the necessary size and scale, and national fragmentation has paralyzed competition and stifled innovation on the pan-European level,” said Coeure.

Europe has also been studying other options, including a digital currency as an alternative to private projects such as Facebook-led Libra. The progress report of which is expected in the coming months.

The U.S. Federal Reserve Bank also recently announced its plans to develop a new "round-the-clock real-time" payment and settlement system, with a hopeful launch date in 2023 or 2024. It is expected to provide instant payments, rivaling that of the private sector.