- The European Central Bank has chosen 36 payment service providers for a 12-month digital euro pilot beginning in the second half of 2027.
- Over 50 applications were received, reflecting strong market interest; participants include banks and non-banks from across the euro area.
- The pilot will test both online and offline transactions, with a beta version that is not yet legal tender, aiming for a potential launch by 2029.
- Digital euro is designed to reduce Europe's reliance on US payment giants like Visa and Mastercard, while complementing cash.
The European Central Bank has officially selected 36 payment service providers to take part in its upcoming digital euro pilot program. This move marks a significant step forward in the long‑awaited project to create a central bank digital currency for the euro area. The pilot, which is set to kick off in the second half of 2027 and run for a full year, will test the technical and operational aspects of the digital euro in a real‑world environment. According to the ECB, the exercise is crucial for refining the user experience and ensuring the system is ready for a potential broader rollout.
Following a call for expressions of interest launched in March 2026, the Eurosystem received more than 50 applications from PSPs across the region. The selected participants include a mix of traditional banks and non‑bank service providers, spanning a wide range of business models and sizes. This diverse group ensures broad geographical coverage, with 19 national central banks from countries like Germany, France, Italy, Spain, and others also involved. ECB Executive Board member Piero Cipollone noted that the strong market interest shows the private sector’s readiness to engage actively and help strengthen the European payments landscape.
Pilot Program Details
The pilot will use a beta version of the digital euro that is functionally and technically close to the final design foreseen in the draft legislation, but it will not have legal tender status. Some selected providers, known as distributing PSPs, will give Eurosystem staff access to beta digital euro services—like setting up accounts and making payments. Others, called acquiring PSPs, will serve selected merchants and enable them to receive beta digital euro payments. A few providers will play both roles. The testing will take place at the ECB and 19 national central banks, involving staff, e‑commerce merchants, and everyday service providers such as cafeterias and restaurants. Participants will be able to make person‑to‑person payments (both online and offline) and person‑to‑business payments at physical points of sale and via e‑commerce, including mobile payments.
Among the selected PSPs are notable names like Adyen, Revolut Bank, Stripe, SumUp, Worldline, and the National Bank of Greece. Spanish participants include Uinku (a subsidiary of Sipay) and an alliance formed by Abanca, Ibercaja, Unicaja, Cecabank, Bizum, and Deloitte. Italian representatives include Banca Monte dei Paschi di Siena, UniCredit, and Poste Italiane; German participants include Deutsche Bank and DZ BANK; Portuguese ones include Banco Comercial Português, Caixa Geral de Depósitos, and Unicre. This broad mix ensures the pilot can test the digital euro across different business environments and consumer behaviors.
Why Europe Needs a Digital Euro
Beyond the technical testing, the digital euro is seen as a strategic tool to reduce Europe’s dependence on non‑European payment giants like Visa, Mastercard, Apple Pay, and Google Pay. The European Parliament’s Economic and Monetary Affairs Committee gave the green light to the digital euro on 14 July 2026, emphasizing that it should complement cash, not replace it. Lawmakers argue that relying on foreign platforms poses risks during international conflicts or political decisions—as seen after the 2022 Russian invasion of Ukraine, when some companies suspended services. ECB President Christine Lagarde has pointed out that most digital payments in Europe currently go through US or Chinese systems, making a homegrown alternative essential for economic sovereignty.
The digital euro is also expected to increase competition and lower costs for merchants and consumers. Many small businesses have complained about rising card network fees, and a central bank‑backed system could drive those costs down. The project aims to offer a secure, efficient, and inclusive payment method that works across the entire euro area without extra charges. It is not a cryptocurrency—it is issued by a central bank, has a stable value, and is legal tender. Privacy is a key concern: the ECB insists that only the user and their bank will have access to payment data, ensuring at least the same level of confidentiality as current digital payments.
How the Digital Euro Will Work
In everyday use, the digital euro will feel a lot like digital cash. Citizens will be able to pay in physical stores, shop online, or send money to others using a digital wallet on their phone, a card, or other compatible devices. One of its standout features is the ability to make payments both online and offline—even without an internet connection, transactions can happen directly between devices, similar to handing over a banknote. Basic services will be free for all users, and the system will work in any euro‑area country without additional fees. It will also support recurring payments like rent or utility bills, making it a versatile tool for daily life.
The pilot will help refine the design and user experience, with regular updates published on the ECB’s dedicated webpage. If all goes well, the digital euro could be fully operational by 2029, though the final decision will only be made after the necessary European legislative framework is in place. For now, the selected PSPs will work closely with their respective national central banks and the ECB to prepare for the pilot exercise, which promises to be a major milestone in the evolution of European payments.
From the strong market response to the broad geographical and business diversity of participants, the digital euro pilot is shaping up to be a comprehensive test of a currency that could reshape how Europeans pay. With a clear focus on reducing external dependencies, ensuring privacy, and keeping cash alive as an option, the ECB is moving steadily toward a digital future that aims to be both innovative and inclusive. The next few years will be critical in determining whether this ambitious project becomes a reality.
