by Joachim Wuermeling, Institute for Deep Tech Innovation (DEEP), ESMT Berlin
When European executives discuss digital transformation, they speak about cloud migration, artificial intelligence, and cybersecurity. They redesign supply chains, modernize ERP systems, and embed sensors in factories. Yet one of the most analog elements of their operations remains largely untouched: the logic of payment.
For boards and C-suites, this blind spot is becoming a strategic liability. It rarely appears on executive agendas, even as leaders approve infrastructure investments that will lock in payment architecture for a decade or more.
As a member of the Deutsche Bundesbank’s Executive Board, I saw how settlement delays and liquidity buffers – barely noticed in stable periods – can amplify risk when conditions tighten. What appears to be routine back-office processing is, in fact, a structural driver of competitiveness and resilience. Today, as money itself becomes digital and capable of automated settlement, that structure is beginning to change.
The debate about the digital euro is often framed as a question of monetary policy or privacy. For corporate leaders, however, it is something more immediate: an operational decision that will shape productivity, liquidity management, and strategic autonomy for the next decade.
Payment is still treated as infrastructure
Most "digital payments" today are essentially instructions between accounts. In cross-border transactions, costs still range from roughly 2 to 7 percent of the transaction value. Settlement can take hours or days, and working capital remains tied up even though goods have already moved on.
This friction is so normalized that it often goes unmeasured. Yet across complex supply networks, it accumulates – quietly reducing capital efficiency.
Where settlement friction hides
Consider the automotive sector, one of Europe’s industrial backbones. A tier-1 automotive supplier delivers components to a manufacturer. Sensors confirm arrival. Quality systems verify compliance. The production line integrates the parts.
Payment, however, follows a separate path: invoice issuance, internal checks, approval chains, and eventual settlement. Days may pass between verified performance and final compensation.
If payment could be automated and embedded directly into digital infrastructure, confirmation of delivery and compliance could trigger settlement automatically. Performance and payment would occur simultaneously. Settlement risk would decline because compensation would no longer be detached from verified delivery. Administrative layers would shrink. Liquidity would circulate more quickly through the value chain.
This is no longer purely theoretical. The European Central Bank has already processed wholesale transactions worth hundreds of millions of euros using new digital infrastructure. Settlement logic is no longer technologically constrained in the way it once was.
The architectural decision boards are making now
Large enterprises across Europe are replacing legacy ERP environments and investing in end-to-end digitization. An ERP platform introduced in 2026 will likely still shape workflows in 2036.
If automated, condition-based settlement is not considered in the design phase, firms risk hardwiring yesterday’s payment logic into tomorrow’s digital processes.
That is not a technical oversight. It is a strategic choice with long-term cost implications.
Payment remains external – a manual afterthought in otherwise automated processes. As digital settlement infrastructures mature, that separation will seem increasingly artificial.
Systems implemented today will either be compatible with digital central bank money capable of automated settlement, or they will not.
Competitiveness and strategic autonomy
The global context reinforces this urgency. The US has chosen to support private-sector stablecoin initiatives within a regulatory framework. China has advanced its own central bank digital currency with strategic clarity. Europe is pursuing a balanced course: regulating stablecoins while preparing the introduction of a digital euro. The European Central Bank has already moved into a new phase of infrastructure development, with wholesale applications advancing ahead of a potential retail launch later in the decade.
For corporate leaders, the precise political timetable matters less than the direction of travel. Digital settlement infrastructures are emerging. For companies operating globally, this means navigating a fragmented landscape: different markets support different digital payment rails, each with distinct regulatory requirements and data governance standards.
European payment flows rely heavily on infrastructures headquartered outside the European Union. In periods of geopolitical tension, such dependencies can become vulnerabilities. Financial infrastructure is part of strategic autonomy, much like energy grids or semiconductor supply chains.
During periods of financial stress, liquidity frictions become visible very quickly. The design of settlement systems influences not only transaction speed but also systemic resilience.
Questions for the boardroom
Chief executives and chief financial officers should begin with practical questions:
- Are our core systems capable of interacting with tokenized forms of central bank money if they become available?
- Where do settlement delays inflate our working capital needs or create avoidable disputes?
- Which parts of our value chain would benefit from simultaneous performance and payment?
- Are new pricing models – such as pay-per-use or automated micro-compensation – commercially viable if settlement becomes instantaneous?
- Are we treating money as static infrastructure in a world where settlement is becoming automated?
Money as systems design
The digitization of supply chains did not simply accelerate logistics; it enabled entirely new distribution models and business strategies. The digitization of money may follow a similar path. Its transformative potential lies not in replacing cash, but in embedding settlement into automated processes and reducing friction at scale.
European competitiveness is often discussed as a matter of external pressure. Transactional inefficiency, by contrast, is an internal variable that leadership can directly influence. For many companies, cross-border settlement costs can determine whether international expansion is viable at all. Whether this variable gets redesigned depends on whether leadership treats it as strategic infrastructure or back-office plumbing.
The digital euro is ultimately a public decision. Preparing for automated settlement is not. That responsibility sits in the boardroom. European executives who address it early will help shape the standards and architectures that emerge. Those who postpone it may find themselves adjusting to frameworks defined elsewhere.
