Europe Moves to Cut Reliance on Visa and Mastercard

Europe wants to become less reliant on Visa and Mastercard, and some worry that Visa and Mastercard payment dominance could be weaponized if relations with the United States deteriorates.

Visa and Mastercard made up almost two-thirds of card transactions in the eurozone in 2022, according to the European Central Bank. And in Europe, 13 member countries do not have national alternatives to Visa and Mastercard, Financial Times reports.

“We are highly dependent on international [payment] solutions,” said Martina Weimert, chief executive of the European Payments Initiative, which is a consortium of 16 European banks and financial services companies.

“Yes, we have nice national assets like domestic [payment] card schemes…but we don’t have anything cross-border.”

They may not have their own payment network, but there is a European alternative to Apple Pay. Called Wero and launched in 2024, this digital payments plan has 48.5 million users in Germany, France and Belgium, according to Financial Times. So there is innovation happening in payments in Europe. 

Here is another example. The European Central Bank is promoting a digital euro that would make payments digitally across the European zone starting in 2029. Once in place, the digital Euro could provide the foundation for a European equivalent of Visa or Mastercard.

“As European citizens, we want to avoid a situation where Europe is overly dependent on payment systems that are not in our hands,” said Piero Cipollone, executive board member of the European Central Bank. 

For right now, Europeans are in the midst of a payment dependence on American companies Visa and Mastercard. They worry that the situation could become weaponized if relations between Europe and the U.S. worsen under President Trump.

“The problem with the digital euro is it will come in a couple of years, maybe after the mandate of [U.S. President] Donald Trump. So I think we are a little bit out of time,” Weimert told Financial Times.  

On Feb. 2, European Payments Initiative and EuroPA Alliance signed an agreement to build a European payment network that would cover 130 million users across 13 countries. This system would be built around the digital wallet Wero, European Business Magazine reports.

Under this new network, Europeans would be able to pay and move money across country borders without using an American payment network. Once built, this new network would provide competition to the long dominant Visa and Mastercard in these European countries.

In January, the Credit Card Competition Act (CCCA) was reintroduced by Senators Roger Marshall (R-KS) and Dick Durbin (D-IL). 

This act calls for banks that issue credit cards and have more than $100 billion in assets to give merchants a choice between two card networks. These card networks may not be affiliated with each other and one of those networks must not be Visa or Mastercard. President Trump showed his support for the act on social media. 

Long dominant as payment networks, Visa and Mastercard may face new competitors, but it would take a lot to knock either company off its dominant perch.

Europe wants to build its own payment network to compete with Visa and Mastercard. But those plans are years away, and in the meantime European countries don’t like relying on Visa and Mastercard for the majority of their payment network needs.

When the European payment network is in place, Visa and Mastercard will face competition for the payment market in Europe.