Wirecard scandal in the european union: “the future of finance is digital”.

The Wirecard scandal is now also occupying the European Union. But their appetite for digital payment remains strong.

While Corona has become even more popular: cashless payment with bank cards Photo: Georg Wenzel/dpa

The scandal surrounding insolvent German financial services provider Wirecard is now also calling the EU Commission into action. Deputy Commission President Valdis Dombrovskis announced tighter supervision. Centralized supervision by the EU is also possible, the Latvian said in Brussels on Thursday.

The scandal shows "that there is room for improvement in the rules and their application," Dombrovskis said. The EU Commission wants to examine how well or poorly supervision works in the 27 member states. At the end of 2021, the authority then wants to act. One possible option, he said, was to introduce direct supervision by EU supervisory authorities.

The German authorities had failed with Wirecard and are now blaming each other. Almost 2 billion euros were lost due to a lack of supervision. Now a parliamentary committee of inquiry is to be set up; even German Finance Minister Olaf Scholz could come under pressure.

However, the German scandal has not spoiled the EU’s appetite for electronic payments and so-called fintech – companies like Wirecard. "The future of finance is digital," Dombrovskis said. The EU Commission launched a comprehensive reform package to keep Europe ahead of the curve.

Simple and secure

For example, the Brussels authority wants to standardize the range of cashless payment systems. This would make it "easier for consumers to pay in stores and conduct online transactions securely and conveniently" in the future. The Commission also wants to promote cross-border payment services.

With the help of real-time transfers, payments could be executed "within seconds," according to a strategy paper from the EU authority. However, the European single market is still very fragmented in this respect, it says. Dombrovskis wants to change that and also promote the controversial virtual currencies.

At the same time, he tried to dispel the widespread fear, especially in Germany, of abolishing cash. Cash should "remain both accessible and generally accepted," the Brussels-based authority stressed. However, many payment service providers and credit card providers are betting on an abolition of cash.

The Corona crisis has also helped to restrict cash payments. For fear of possible infections, many supermarkets and restaurants now only accept cashless payments. The fact that the EU now wants to facilitate and promote digital payments could further fuel fears of an end to cash.

"Despite all the euphoria about the digitalization of payments, it must be clear that cash must not be allowed to fall by the wayside," warns CSU MEP and financial expert Markus Ferber. It is "more than pleasing" that the EU Commission has finally committed itself to cash. Now, however, action must follow.

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