Whether online banking, payments via smartphone or with the Girocard - cashless payment methods have long been standard. The European Central Bank (ECB) has also been considering for some time how the euro can be transferred into the digital world. The result of these considerations: a digital euro. This virtual counterpart is intended to act as a stabilizing anchor for traditional coins and banknotes. The current status.
The ECB's Idea
Since October 2021, the topic of a digital euro has been gaining momentum. Since then, experts from the ECB and national central banks have been working on designing the supplementary payment method around the digital twin of cash. After a two-year investigation phase, a decision is expected in the fall of 2023 – for or against the digital euro.
But what is behind all these considerations? Does our society even need another digital payment alternative after checking accounts, GiroCard, Visa, Sepa Instant, and others? The ECB is strongly inclined towards "yes." This is because the share of cash payments continues to decline significantly. The digital euro would provide consumers with an electronic form of central bank money that would be accepted throughout the euro area. This would ease daily life and also accommodate the growing preference for cashless payment methods.
Analog and Digital – Strong Euro Duo
Thus, the answer to the question of why another solution for cashless payments needs to be introduced is not yet sufficiently clarified. The digital euro as a complement to cash is destined for greater things: It could ensure the monetary policy sovereignty of the euro area, increase the efficiency of the European payment system, and thus take on an important societal function. In addition, the ECB wants to offer a safer and more reliable means of payment with the digital counterpart to banknotes and coins, which also protects user privacy better.
Practically speaking, payment should hardly differ from current methods – only improve. For example, the use of the digital euro is conceivable via banking apps. Unlike current cryptocurrencies, however, users need not fear data collection and sales, as the digital euro does not pursue commercial purposes. Furthermore, faster payments – both online and offline – should be possible.
Europe-Wide Payment Solution Found? Retail Open-Minded!
Another payment method that is valid throughout the European area – that could be the future of the digital euro. Probably not before 2025. Until then, the alternative will continue to be tested thoroughly. However, it is already clear: Ultimately, the digital euro is not intended to displace traditional coins and banknotes, but merely to complement them sensibly.
How buyers accept the new payment option will also determine what the future of the digital euro looks like in retail. Retailers are initially open to the introduction – and even expect advantages. For example, a Europe-wide consistent payment method could have a positive impact at the point of sale as well as in e-commerce. The topic of fees and transactions with system owners could also change for the better with the digital euro.
Cash Remains a Reality
However, it is important: The digital euro is still a future scenario. Cash, on the other hand, is real and tangible. This is also linked to the challenges currently faced by retailers due to laborious cash procurement or the complexity of various processes in cash logistics. Therefore, thoughts should now focus mainly on solutions that depict these processes safely, transparently, and much more efficiently. Our software solutions for the POS address this. With a strong foundation, the view can then be directed towards the future.
All our products for forward-looking cash logistics in retail can be found here.
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