QR-code payments and contactless transactions: a review of the digital euro application
The EU Central Bank is actively working on a mobile application for the digital euro. The main goal of the project is to provide users with a simple and at the same time multifunctional service for conducting transactions with CBDC. It has become known that the application will accept payments by QR code and there is also an opportunity to conduct contactless operations. The service will allow making payments much more convenient and will also help to get rid of the necessity to use the services of intermediaries, which in this case are banks.
It is known that the application has basic payment functions, the processing of which is usually undertaken by intermediaries. Access to the digital euro will be carried out in the service through an independent channel. At the same time, operators can integrate e-euro into their applications and fintech products so that users can receive standard banking services.
The representatives of the ECB note that the first version of the application will allow making contactless payments, paying via the Internet, and using QR codes. With time, the developers are planning to extend the functionality of the service. The main thing is to provide users with the necessary set of instruments to make transactions with digital euros. The authors of the project pay special attention to the simplicity of the functionality that will be intuitively clear for the wide audience.
It should be noted that the need to introduce digital currency in the EU has been discussed since 2019. Only in 2021, experts presented a report, according to which the development of CBDC may take 4 years. The process of creating digital currency itself is broken down into several steps, including the stages of consultation, research of possibilities, testing, and others.
According to the concept itself, CBDC combines the characteristics of fiat and cryptocurrency. Electronic money will be available to both individuals and businesses in the EU. At the same time, the regulator emphasizes that the digital euro will not replace fiat money. The purpose of the CBDC is to complement and increase the capacity of standard money. The popularity of cryptocurrencies encourages central banks to provide a tool with similar functionality, which will be regulated by the state. In addition, ordinary users will not see the difference between the card account in conventional euros and in digital.
The price of CBDC will be controlled by the central bank, which will make it more stable and transactions with it more predictable. One of the main advantages of digital currency is the speed of payments. In this case, there is no need to coordinate with banks or wait for transaction confirmation. Thanks to the electronic euro, transactions are carried out instantly with a high level of security. In addition, unlike cryptocurrency, CBDC is controlled by the state, which protects its holder from market fluctuations and significant losses.