"Europe Urgently Needs Alternatives to U.S. Visa and Mastercard Payment Systems"

Fears of "weaponization" if ties with the U.S. deteriorate

There are growing calls in Europe to urgently reduce dependence on U.S. payment systems such as Visa and Mastercard. As relations between the United States and Europe, traditionally close allies, have been shaken since the inauguration of U.S. President Donald Trump, there are concerns that the market dominance of U.S. payment systems could be weaponized if ties deteriorate further.

On the 9th (local time), Martina Weimert, Chief Executive Officer (CEO) of the European Payments Initiative (EPI), said in an interview with the Financial Times (FT), "We are heavily dependent on international payment solutions." EPI is a consortium made up of 16 European banks and financial services companies.

Visa and Mastercard. Reuters Yonhap News Agency

CEO Weimert said, "Of course there are excellent national assets such as domestic card payment systems, but there is no cross-border payment system," and urged, "We all know that independence is extremely important and that this is an urgent issue, so we must take action right now."

According to the European Central Bank (ECB), as of 2022, about two-thirds of card transactions in the euro area (21 countries using the euro) were handled by Visa and Mastercard. Thirteen euro area member states do not have their own payment systems to replace these U.S. card companies. Even in countries that do have domestic payment systems, their usage is declining.

As cash usage decreases, European officials fear that the enormous influence of U.S. payment companies could be weaponized if relations between the United States and Europe worsen. Former ECB President Mario Draghi recently pointed out, "Deep integration has created interdependencies that can be exploited when not all partners are allies," adding, "Interdependence, once seen as a source of mutual constraint, has now become a tool of bargaining and control."

EPI launched a European-style digital payment system called "Wero" in 2024 as an alternative to Apple Pay. Wero currently has 48.5 million users in Belgium, France, and Germany, and the service is planned to be expanded to in-store and online payments by 2027.

CEO Weimert said that, due to the recent geopolitical situation, building a cross-border European payment network is emerging as a mainstream policy agenda.

The ECB has pointed out that past private-sector-led payment projects failed to unify standards and scale up. In response, it is pushing to introduce a digital euro across the euro area with the goal of strengthening monetary sovereignty.

However, the digital euro faces resistance from both political and financial circles. Some banks are lobbying against it, arguing that it undermines private-sector efforts. The FT projected that there will be an intense, down-to-the-wire battle in the European Parliament vote at the end of this year.

There is also criticism that the digital euro will come too late. The warning is that if geopolitical tensions escalate, it may be introduced too late to serve as a realistic alternative. CEO Weimert said, "The problem with the digital euro is that it will only be introduced in a few years, probably after the term of U.S. President Donald Trump," adding, "I think we have already missed the timing a bit."

This content was produced with the assistance of AI translation services.