The European Central Bank has taken a key step towards the realisation of the digital euro by selecting Portuguese startup Feedzai as the main provider of an AI-based fraud detection system.
Under the framework agreement, Feedzai, together with PwC, is to develop a transaction risk model for the digital euro – analysing deviations from the normal pattern of customer behaviour, payment history and interactions. This system is to support payment service providers in deciding whether to approve remittances in digital wallets.
The contract is for four years with an option to extend to 15 years. The initial value stands at €79.1m, with a maximum budget limit of €237.3m. In the same framework contract process, the ECB awarded contracts for other key components of the digital euro – from offline solutions to data exchange mechanisms – with values ranging from €27.6 million to €220.7 million.
It is worth noting that the framework agreements do not provide for disbursements until the project actually starts, allowing the ECB the flexibility to adjust the scope in light of legislative changes. The start of the de facto phase depends on the adoption of the Digital Euro Regulation by the EU institutions – a decision expected in mid-2026. The digital euro is scheduled to take off in 2029.
Feedzai, a Coimbra-based company, already operates $8 trillion worth of payment systems annually for clients such as Portugal’s Novobanco and Abu Dhabi’s Wio Bank. At the same time, it has announced a $75 million funding round, bringing it to a valuation of $2 billion.
This move by the ECB is part of a broader political and technological project: building European sovereignty in digital payments and reducing dependence on US-based payment systems. – While the project remains highly dependent on the regulatory and implementation framework, the choice of Feedzai itself reflects the Eurozone’s ambition to make the digital euro not only a means of payment, but also the central security infrastructure for a new generation of payments.
