THE STUDIO REPORT - EP 13

Hello, dear Sippers, Payments geeks, and Everything in between! 👋

Welcome to the thirteenth edition of The Studio Report by Spill the Tea on Payment.

Let’s stop building 18-billion-euro roundabouts.

In this month’s memo:

Scroll down for the rest of the newsletter👇

EuroPA and Wero's signature of the memorandum is seen by many as a major milestone in European sovereignty on Payments.
We solved the solution, Wero/EuroPA are the heroes of the story.

End of story, we will all pay with interoperable QR codes within 11 countries (although, not sure what will be the final product proposal that will emerge from this memorandum).

But can we be satisfied with a memorandum that was signed under pressure without a clear solution?
  Many in the industry and in institutions criticised what looks like the usual European trope: being divided is better than finding together a solution.

European markets’ perspectives today are completely uncertain, because it seems either we are discovering a whole industry depends  from a Duopoly based in the US, or we knew we had a dependance but did not want to face this uncomfortable truth.

The results of this, a maze of local, supra-national, private-driven, public-driven initiatives to gain a seat at the table of Payment sovereignty, fueled by an inflation of contents and comments talking about the topics.

What’s dramatic in this story is the whole theatre of politicians, central bankers and regulators, as well as industry leaders. They all promise with their hand on their heart:

« Yes, we need European sovereignty, but we actually wants our system to be used. »

All work in silo, only thinking about their interest and not the interest of the Common.

Until recentely, none of the ecosystem never shared a plan until Mr Trump decided to threaten Denmark to invade Greenland.  From there, the machine got crazy, and we have seen an acceleration of decisions without any coherence in the Vision.

The Vision exists, or at least try to exist. 

As a matter of fact, the European Union and ECB (European Central Bank) did issue a document to share their vision.  But today, it has no value, because it tries multiple approaches to see if one will stick somewhere, somehow.

PSD III was approved by Parliament, trying desperately to reanimate the Open Banking corpse. A gigantic industry fiasco, if we compared with the initial ambition 10 years ago, because the ECB never tried , or too late to gain a consensus that at the end of the day never worked properly. So now, the venerable institution is doubling down on the digital euro, a multi-billion project, compounding a scheme and a digital currency

But the big question remains, where is the coherence of our decision makers? We fall into the same trap again as PSD II, 10 years ago :

Launching a new initiative that is imposed on private actors to accept a digital currency nobody wants, so the industry tries to be creative, and multiplies initiatives to see if one will work better than the digital euro.

ECB by refusing to take its mandate as the organising body, because it doesn’t have the right to do so, adds more chaos. They mix a bit of everything they could learn from other countries (like PIX or UPI), and a bit of Instant Payment. They sponsor banking initiatives (like EPI), while imposing a CBDC to the very same banks, while CBDC competing with Euro stablecoins (launched by the same banks). It does not make sense.

I think again about the words of Mrs Lagarde last year, which talks about a just-in-case project for Digital Euro. This project could cost between 5 billions euro (according to ECB) up to 18 billions (according to BNP). Something even more worrying is actually the delta between ECB and the banks estimation, showcasing the big disagreement on European Payment Sovereignty.

This « just in case » looks like the fantasy of local councils when they build a roundabout, but the roundabout although annoying are less expensive and less damaging for democracy.

This month, I published an essay on Agentic Commerce and how the fever could benefit first to the ecosystem surrounding Retailers and Brands.

I wrote the first skeleton of this essay in December, just after the announcement of Stripe and OpenAI, but before the launch of UCP (Universal Commerce Protocol)

I wrote this whole piece after the Unified commerce illusion series where I dissecated what it meant for brands and retailers to be really unified, but also how this innovation has been fueled first and foremost by a mechanism deeply intricated in a crisis within Retail that benefits the industry.

This extractive logic of monetising dependance as simplicity, described in my essay (click here to read it), seems to be the same mechanism in progress when it comes to Agentic Commerce.

But at the difference of Unified Commerce, “Agentic Commerce” is going against the flow of some theories from eminent sociologists, including Jean Baudrillard, who demonstrated in its essay, the Society of Consumer, that Consumption is first and foremost an irrational act. Since consumers within Consumption search for signs and symbols, it contradicts the rationality induced by the use of agent.

One of my main interpretations is that Payments Industry needs agentic commerce to create a better predictability in operations, by collecting recurring patterns. It will therefore help in safeguarding margins and profitability, even if this is against the interest of Retailers

Of course, all the agentic commerce “agenda” is facilitated by the extensive use of semiotic signs inherited from the sci-fi where an army of machines works at the service of human.

My dear Jean Baudrillard did work great on LinkedIn this month, but I will talk about the other post that did well : “the Airbus of Payments”

I worked on this post following a number of debate around what I called in another post the 5 plagues of European Strategic Autonomy, AKA all the things we use not to make Airbus a reality.

Fast forward 1 year after using this term, yes, it feels good to see politicians getting conscious we do have a problem and even use the same term as I did, and i finally am not the only eccentric. But I can’t help thinking the failure of creating Airbus of Payments reveals is what industry cannot denegate, refusing to question the current system and the relationship of powers and looking away an obvious issue.

Next month, I am preparing a really nice document on this very specific of what it means to make Payments sovereignty, this is exactly why the Studio is here, to help decision makers and leader to better grasp this fuzzy notion and make something out of it.

You still can drop a line on [email protected]. I will read it with interest.

See you next month!