The European Central Bank (ECB) is considering plans to develop a digital euro app that would enable consumers to use the proposed central bank digital currency (CBDC) to make contactless and QR code-based payments and “facilitate a standard approach to connecting end users to intermediaries” including banks and other payments processors.

The app would include “only basic payment functionalities processed by intermediaries” and would offer consumers an “independent access channel” to the digital euro whilst still allowing intermediaries to integrate the digital currency into their own platforms so that users could also access it via “banking apps and interfaces they are already familiar with”, ECB executive board member Fabio Panetta told the European Parliament’s Committee on Economic and Monetary Affairs.

“The first releases are likely to offer contactless payments, QR codes and an easy way to pay online,” Panetta added.

“As the technology evolves, other forms of payment may become available in the future. When it comes to the hardware, people could pay either with mobile phones, physical cards or possibly other devices like smartwatches.

“A convenient user experience requires close cooperation with all sections of the market: consumer groups who know best about consumer needs; intermediaries who would provide services to their customers; and merchants who want to offer a convenient payment solution.”

Objectives

“The underlying objective behind making such an app available is to provide the market with the minimum required development, ensuring that intermediaries — including smaller ones who may not want to bear the investment costs of setting up their own payment interface — keep their roles in digital euro distribution,” Panetta explained.

“At the same time, the app would respond to the preferences of certain end users who have called for an independent access channel in which basic functionalities are available.

“The dual approach of an integrated option plus a digital euro app would yield the best results in terms of providing value for end users, as they would have greater choice.

“This also applies to intermediaries, since they would be able to build their integrated solutions and attract customers through value-added services, whilst overall ensuring a speedy time to market for the digital euro.”

The ECB laid out a series of design and distribution of options for the digital euro and its plans for 2023 in the second progress report on the two-year investigation phase that it published earlier this month.

It launched the investigation phase in July 2021 and revealed plans to trial five prototype digital euro payments solutions across key use cases in September 2022

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