ECB Selects 36 Payment Providers for Digital Euro Pilot

What happened

The European Central Bank has selected 36 payment service providers from across the euro area to participate in a practical digital euro pilot.

The selected organisations include banks and non-bank payment providers with different business models, sizes and geographic coverage. More than 50 organisations applied after the ECB issued a call for expressions of interest in March 2026.

The pilot is scheduled to begin in the second half of 2027 and run for 12 months. It will take place at the ECB and 19 participating national central banks across the euro area.

The ECB said the exercise will use a beta version designed to be technically and functionally close to the digital euro described in draft European legislation. However, the beta instrument will not have legal tender status and should not be described as the official launch of the digital euro.

Participants will perform different roles. Distributing payment service providers will give eligible pilot users access to beta digital euro services, including opening an account and making payments. Acquiring payment service providers will connect selected merchants and enable them to receive beta digital euro payments.

Some participants will perform both functions.

What the pilot will test

The exercise is intended to test more than a digital wallet interface.

It will examine the digital euro’s technical functionality, operational processes and user experience across several payment scenarios. Planned testing includes:

• Person-to-person payments
• Online and offline payment functions
• Physical point-of-sale transactions
• Software Point of Sale acceptance
• Ecommerce checkout
• Mobile payments
• Merchant receipt of digital euro transactions

Pilot users will include staff from the ECB and participating national central banks. Selected ecommerce merchants and businesses providing everyday services, such as cafeterias and restaurants, will also take part.

This allows the Eurosystem to test both sides of the payment flow: how users access and authorise digital euro payments, and how merchants receive, confirm and manage those transactions.

Why it matters

The announcement moves the digital euro project from policy and technical preparation toward a more practical testing phase.

European lawmakers are still working on the legal framework. The pilot does not replace that legislative process, and it does not guarantee that a digital euro will be issued. The ECB has said potential issuance remains conditional on the necessary legislation and a future formal decision.

Nevertheless, selecting payment providers is important because the digital euro is not expected to operate only as a central-bank application.

Under the proposed model, regulated payment providers would remain involved in customer onboarding, wallets, payment instruments, authentication, transaction management, merchant acceptance and customer support.

The pilot will help determine how those responsibilities can work across banks, non-bank PSPs, central-bank infrastructure and merchant systems.

Impact on merchants and payment providers

For merchants, digital euro acceptance could eventually become an additional payment rail alongside cards, wallets and account-to-account methods.

Operational readiness would involve more than adding a new checkout button. Payment teams may need to consider:

• Payment initiation and authentication
• Online and offline transaction states
• Checkout and SoftPOS integration
• Refunds and reversals
• Merchant settlement
• Transaction reporting and reconciliation
• Fraud and double-spending controls
• Customer-support procedures
• Continuity during connectivity failures

The inclusion of ecommerce merchants is especially relevant for cross-border businesses. A payment method designed for the euro area would still need consistent order references, confirmation messages, refund workflows and reporting across different countries and channels.

Payment providers may also need to support both distributing and acquiring functions, depending on their role. This could affect wallet infrastructure, merchant onboarding, compliance processes and connections to national central banks.

What to watch next

The selected providers will now work with the ECB and their respective national central banks to prepare the pilot environment.

Key developments to monitor include:

• Publication of the complete implementation timetable
• Technical requirements for participating PSPs
• Merchant selection and onboarding
• Online and offline payment limits
• Authentication and privacy controls
• Settlement and reconciliation arrangements
• Liability for failed or disputed transactions
• Progress of the EU legislative process
• Findings published during and after the pilot

The ECB continues to prepare for a possible digital euro, but the project remains in a testing and legislative stage.

The immediate significance of the announcement is therefore not that European consumers can begin spending digital euros. It is that the ECB has identified the payment providers that will help test how a potential digital euro could be distributed, accepted and operated in real payment environments.