t simply serve as an additional distribution channel for their products ; they had to overhaul their business models in order to survive. in contrast, the retail payments industry, and particularly the end - user to service provider sphere, is only now starting to be affected by structural changes arising from the digital revolution. it is hard to say whether retail payments will change as rapidly and fundamentally as the music or newspaper industry. i expect that this conference will shed more light on user behaviour and choice. what i think is safe to say is that user expectations have undoubtedly changed due to the digitalisation of our lives at home and at work. at the ecb, we receive many inquiries and comments from individuals and companies across europe about retail payments. we are frequently asked why, in this age of real - time communication, e - payments take longer than e - mails. users expect retail payments to be like other digital content : easy, secure, not obstructed by national borders – and instantaneous. let me make another point about the music, publishing and media industries. we have seen that while the sales of cds and printed newspapers are declining, they have not bis central bankers ’ speeches disappeared. there are people who still use them, like them and pay for them. likewise, i think it is illusory to expect that cash or “ traditional ” cashless payment instruments will totally disappear within the next five to ten years because of digitalisation. 1. the cashless society, as appealing as it may sound, is probably just as elusive as the much vaunted paperless office. however, digitalisation can make cashless payments more efficient and attractive, to the extent that they become a viable alternative to cash. what matters most is that users have a choice. they should be able to pay in the way that suits them best in different payment situations. at present, person - to - person payments such as the sharing of a dinner bill are often restricted to cash. in future, easy and secure alternatives such as mobile person - toperson payments should be possible – across europe. as i mentioned just now, users – be they consumers, retailers or businesses – do not see why retail payments cannot be like instant messages. so it ’ s no surprise that instant payments have become the “ hot ” topic in the retail payments industry. we do not need to discuss any longer the “ if ” and “ why ”, we have to discuss the “ how ”. as you well know, in december 2014

yves mersch : getting the balance right – innovation, trust and regulation in retail payments introductory speech by mr yves mersch, member of the executive board of the european central bank, at the joint european central bank / suomen pankki ( bank of finland ) conference, helsinki, 4 june 2015. * * * ladies and gentlemen, it is a great pleasure for me to provide the introductory remarks at this conference on innovation, trust and regulation in retail payments. before i start, i would like to thank suomen pankki for organising this event jointly with the ecb, and for hosting it. i am also very grateful to erkki liikanen for opening this conference. i am sure that we will spend two fruitful days having valuable discussions and exchanges on the economics, strategies and policies of retail payments. getting the balance right. it makes me think of nik wallenda, who crossed the niagara falls on a tightrope in 2012. the right mix of courage and caution that was necessary for that feat is required in other walks of life, too – and retail payment innovators are no exception here. in my remarks today i ’ d like to cover three things. first, i will outline the structural changes and challenges that the retail payments industry is facing as a result of digitalisation. second, i will touch upon users ’ changing expectations, also resulting from digitalisation. third, i will make some suggestions on the responses needed from the industry and the regulators. since the late 1980s, digitalisation in communication and information technology has triggered significant social and economic change worldwide. our professional and our private lives have been greatly affected by the digital revolution. and digitalisation is driving innovation in the financial sector as well. widespread use of the internet, of mobile telephony and of social media has created a situation in which information, communication and commerce are no longer subject to the constraints of time and space. they can be accessed 24 / 7, instantaneously and at global level. the digitalisation of content has disrupted entire industries : think of what has happened to the music or publishing industry, or in the media. consumption of digital content has changed quickly and substantially. it has been quite a painful process for the content providers because it has had a major impact on their traditional revenue models. in the music industry, the sharing of mp3 files over the internet quickly unsettled the long - standing business model of physical recordings. record companies had to learn that the internet shouldn ’