The European Payments Initiative (EPI) was launched last year and is seeking to get more banks and other players in payments on board by December to finalise plans to start rolling out its instant and card payments network.
"Public funding would be nice," EPI Chief Executive Martina Weimert told an event held by the European Payments Institutions Federation. "Let's not hide it - it's going to be a massive investment. It's expensive."
Retailers say they are not ready to pay for it, while banks and other EPI shareholders "can carry only so much", Weimert said, without giving details on the investment needed.
Deutsche Bank, UniCredit, BNP Paribas, ING, Societe Generale and Sabadell are among the 22 banks from seven EU countries, including France, Germany and Spain who are backing the venture.
The European Union has been keen to achieve strategic autonomy in financial services, such as by cutting reliance on U.S. Mastercard and Visa for cross-border card payments. It's unclear whether that will extend to financial backing for EPI.
Weimert said EPI was now in a "critical phase" of decision making over the next few weeks.
It will build a new system and largely replace a plethora of national systems to reduce fragmentation and overlaps in payments, she said, aiming to launch in 2022 peer-to-peer transactions based on instant payments, followed by e-commerce.
"It is a major shift so it will take time. Anybody who tells you it's an easy call and let's do it quick and dirty, well it's not really looking to transform the European ecosystem," Weimert added.
(Reporting by Huw Jones; Editing by Emelia Sithole-Matarise)
By Huw Jones