The clock is ticking - Facebook's Libra makes European banks sweat

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Facebook's Currency Project Libra increases the pressure on European banks to provide real-time transaction systems to their customers. Transfers within seconds are currently only possible in parts of the eurozone. The responsible European Payments Council (EPC) now expects that by 2020 almost all European financial institutions will join the SEPA Instant Payment system.

Not only in the weather there are the heat records these days. Since Facebook presented its currency project Libra to the public ten days ago, competition in the financial sector has also seemed to be getting hotter.

Especially with regard to the processing of real-time transfers, Libra is currently causing Europe's commercial banks to sweat. For example, the Stable Coin, which is intended to enable global remittances in a matter of seconds, could increasingly become a competition for European financial institutions. This is reported in industry statements to Reuters.

In the euro zone, the SEPA instant payment system currently enables instant transfers between different banks. However, at times only around half of all European funds have joined the network. The pressure from Facebooks could in turn change this soon, believes Etienne Goosse of the European Payments Council EPC:

The clock is ticking. [Global corporations] offer global solutions under a global brand that consumers currently seem to find wonderful [...] so we have no time to lose.

By 2020, he expects the other European financial institutions to join the SEPA system, which is managed by the EPC. Only then could transaction errors, as they are still common practice, be avoided, the Committee says.

Regardless of whether Libra is a success, banks need to be foresighted and ready to face global competition, Goosse said.

Can European banks keep pace with Libra & Co.?
With regard to real-time transactions, several systems of different clearing houses are currently competing in the euro area, but each of them only brings together a handful of banks under their common umbrella.

Two of the currently largest providers are the French banking association EBA, which cooperates with the Spanish and Italian payment services Iberpay and Nexi. On the other hand, the European Central Bank has been operating the TIPS system since last year.

The task now is to make these systems compatible,

Piet Mallekoote, Managing Director of Dutch Payments Association, told Reuters.

But even if a common system for instant payments within the euro zone succeeds, it is questionable whether this will take the wind out of the sails of the competition. So Facebook can rely on an established customer base, which will find it difficult to turn away from easy-to-use apps. Because for comparable payment services, the house banks - such as in online banking - first obtain the permission of Facebook users.

Meanwhile, the Bank for International Settlements (BIS) warns in its latest report that global tech companies are becoming systemically important financial players. Although Libra & Co. possessed pioneering potential in terms of financial inclusion and efficiency. However, among other things with regard to the competition between commercial banks, legislators would now have to ensure that corporations do not develop into digital monopolies.

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Interesting, thanks for posting @e-r-k-a-n.
UPVOTED - enjoy your DLIKER's

the time is ticking , bitcoin will go moon