Competition should be enhanced, since all consumers using payment services, and not just those making cross-border payments, will be able to choose between payment service providers throughout the euro area, regardless of where they might be located. This should foster innovation in the provision of payment services.
If the resultant liquidity is sterilized, it puts upward pressure on interest rates which not only hurts competitiveness, but also, in a curious variation of the Dutch disease, encourages further flows. Capital inflows far in excess of a country’s absorptive capacity could pose problems other than currency appreciation.