Q13: What would be the link between instant payments and the digital euro?

The European Central Bank answers:

Today, when consumers make cashless payments in shops, merchants don’t receive the money immediately. The digital euro would change that – all digital euro payments would be instant.

The single set of rules, standards and procedures being developed for the digital euro would mean that instant payment solutions could be further developed to reach all euro area countries. This would reduce Europe’s dependence on the small number of private non-European companies that currently dominate the payments sector.

We answer them:

While today money spent at shops is indeed most of the time not immediately transferred to the merchant’s account, there do already exist more modern instant settlement methods for payments in shops (such as Twint in Switzerland, Swish in Sweden, or Vipps in Norway, which incidentally are all operated by European companies) and—more prominently—Instant SEPA transfers within the euro area. The digital euro in its account-based online version has no technical advantage over these other options for citizens residing in a single country.

A key objective of the digital euro seems to be to limit market access for non-European instant payment service providers, limiting consumer choices. This objective seems incompatible with Article 119 of the Treaty for the Functioning of the European Union (TFEU) establishing the principle of an open market economy with free competition [1].

On the other hand, payments with the offline version of the digital euro will need Internet connectivity to be finally cleared, i.e., are not instant (KF2). In case of failures, it is unclear who bears the liability, or when the failure would even be detected (KF3).

  1. M. Gütschow and B. Lucke, The proposed design of the digital euro: A critical analysis, Digital Finance, vol. 8, no. 1, p. 7, 2025. doi:10.1007/s42521-025-00171-2