Physical commerce

The card trap and the hardware dependency.

In high-frequency physical commerce, every transaction carries a card cost that compounds at scale. Fuel stations and toll booths are typical examples, where the sheer volume of transactions makes interchange and scheme fees a meaningful cost line.

Building a mobile app as a payment interface, like a fuel station app or a mobility app, requires embedding credit card details. The merchant becomes locked into card rails. Every transaction carries interchange and scheme fees, with PCI-DSS compliance overhead stacked on top.

Physical payments also depend on dedicated terminal hardware that isolates transaction data from the rest of the business. The hardware serves a single transactional purpose, then sits idle. Merchants want their own "Super Apps" that bring payment and loyalty into a single brand experience, but card-based payment facilitation makes that ambition expensive and slow to build.

Card payments accounted for 57% of all non-cash transactions in the euro area in the first half of 2025, with 44.0 billion card payments processed in that period. Cards now dominate the cashless payments stack across Europe.

ECB — Payments Statistics H1 2025

13 euro area countries have no domestic card scheme and rely entirely on international networks. Visa and Mastercard together process approximately two-thirds of card payments in the eurozone, giving merchants very limited alternative infrastructure and little room to negotiate fee terms.

ECB — Card Schemes and Processors Report, February 2025

EuroCommerce estimates that Visa and Mastercard scheme fees cost European merchants approximately €1.5 billion annually, spread across hundreds of distinct charges that merchants describe as opaque. Fees have grown consistently since 2016 and effectively neutralised much of the savings intended by the EU's 2015 Interchange Fee Regulation.

EuroCommerce / European Commission — EC Antitrust Investigation into Visa and Mastercard Scheme Fees, 2024–2025

SRTP turns the smartphone into the point of sale.

SEPA Request-to-Pay combined with SEPA Instant Credit Transfer turns the merchant's app and the customer's smartphone into a direct point of sale. The merchant's app interfaces directly with the customer's bank, sending a structured payment request that the customer approves in their banking app. This removes both the card details burden and the dependency on dedicated terminal hardware.

Structured transactions - QR Code Trigger

For pumps and high-frequency points of sale

• Merchant's POS or pump generates a unique QR code with the transaction context
• The QR encodes the payment amount and a structured reference for reconciliation
• Customer scans with their bank app and approves with biometric or PIN
• Works for any ticket size, with full structured data flowing back to the merchant

Low-value, high-frequency - NFC Tap-to-Pay

For parking and transit

• Customer taps their smartphone on the merchant's NFC point
• Streamlined approval flow optimized for transactions under defined limits
• SEPA Instant settles in seconds without manual confirmation
• Designed for transactional speed at scale

A driver pulls into a fuel station and scans the pump's QR code in their banking app. The fuel flows immediately on approval. A commuter taps their phone at the toll gate, and the barrier opens. Both transactions settle in seconds via SEPA Instant, with full structured data flowing to the merchant.

From physical trigger to settled payment.

1. Physical trigger: QR scan or NFC tap - At the physical point of interaction, the customer scans a dynamic QR code or taps their smartphone on an NFC point. The trigger carries the full transaction context for the SRTP payload.
2. ‍Bank app presents a pre-filled request - The customer's bank app receives the SRTP and presents a structured payment request with all transaction details pre-filled. Nothing for the customer to type.
3. ‍Customer approves with biometric or PIN - The customer confirms with biometric or PIN. For low-value NFC taps, the approval flow can be streamlined within PSD2 limits.
4. ‍SEPA Instant settles and data flows back - SEPA Instant Credit Transfer settles the payment in seconds, 24/7, in central bank money. The structured transaction data flows back to the merchant's app, enabling immediate loyalty crediting and automatic reconciliation.

What merchants and customers gain

• ‍Lower transaction costs - Bypassing card schemes removes interchange and scheme fees from the cost stack. For physical commerce with high transaction volume, the savings compound at scale.‍
• Instant settlement - SEPA Instant settles in seconds, 24/7, in central bank money. Card payments typically settle in T+1 to T+2 days. Working capital becomes available the moment the transaction completes.‍
• Structured data and automated reconciliation - Every SRTP carries the full transaction context as structured ISO 20022 data. The invoice ID and loyalty reference arrive with the payment, removing manual reconciliation work.‍
• Unified brand experience - The payment happens inside the merchant's app, in the same flow as product selection and loyalty redemption. The customer stays in the brand experience instead of switching to a card terminal or third-party gateway.‍
• No hardware dependency - The customer's smartphone becomes the terminal. Merchants stop paying for dedicated payment hardware that locks in transaction data and limits operational flexibility.