ECB Defines Merchant Fee Cap For Digital Euro

The digital euro is moving out of the laboratory into concreteness. The European Central Bank now sets a precise schedule : selection of payment service providers starting in 2026, then launch of a one-year pilot in 2027. After years of studies and consultations, the project reaches an operational milestone. Behind these deadlines lies a global ambition: to sustainably embed the digital euro at the heart of the European payment system and redefine the balance of power in the Eurozone.

Selection of providers and organization of the pilot

Piero Cipollone, member of the Executive Board of the European Central Bank, confirmed that the institution will begin selecting payment service providers in the first quarter of 2026. The announcement was made during a meeting of the Executive Committee of the Italian Banking Association.

The pilot, scheduled for twelve months, should start in the second half of 2027. According to the details shared, this test phase will involve “a limited number of payment service providers, merchants, and staff members of the Eurosystem”.

Specifically, the setup will revolve around the following elements :

• The selection of authorized PSPs within the European Union starting in the first quarter of 2026 ;
• The launch of a 12-month pilot in the second half of 2027 ;
• The participation of a limited number of PSPs, merchants, and Eurosystem members ;
• Gaining operational experience on user integration, settlement, and liquidity management ;
• Better visibility on infrastructure, compliance, and human resource costs.

This stage follows on from the transition to the next phase of the project in October. The ECB aims for a launch in 2029, subject to the adoption of a legislative framework during that year.

Protection of European systems and fee regulation

Beyond the operational schedule, Piero Cipollone clarified the strategic logic of the project using certain on-chain data. The digital euro will be structured to preserve the role of banks in the Eurozone payment system.

He stated : “banks could lose their role in payments not only because of stablecoins but also due to other private solutions”, emphasizing that competitive pressure does not come solely from stablecoins but also from other private solutions. He notably pointed to European dependence on international networks such as Visa and Mastercard.

The fee issue also holds a central place. Cipollone indicated that “the cap on fees that merchants will pay on the digital euro network will be lower than those charged by international payment networks, which are generally more expensive, but higher than those applied by domestic payment systems, usually the cheapest”.

The fee cap applied to merchants will thus fall between international networks and domestic systems like Bancomat in Italy or Bizum in Spain. This architecture aims to preserve the competitiveness of European solutions while regulating costs.

The timetable is set, the strategy assumed. What remains is the political stage : if the European Parliament validates a major advance, the digital euro will enter its decisive phase. Between monetary sovereignty, competitive balance, and payment transformation, the ECB moves cautiously. The coming months will tell if Europe is ready to take the step.