Why Europe needs a payment system beyond Mastercard and Visa

Most card or online purchases in Europe go through Visa or Mastercard, two American companies that lead global payments. EU leaders now see this as a risk Europe can’t ignore, and they’re acting.

Wero is a digital wallet created by European banks and payment companies to avoid using card networks. It uses instant bank transfers, which remove middlemen, lower fees, and keep data within Europe. Wero already has tens of millions of users in Germany, France, and Belgium, and it’s growing quickly.

Two main reasons drive this effort: control and cost. The European Central Bank warns that relying on foreign payment systems leaves Europe open to political pressure or sudden disruptions. After Russia invaded Ukraine in 2022, Visa and Mastercard quickly cut off Russia, blocking it from the global payment system almost immediately.

ECB President Christine Lagarde has made it clear that most digital payments in Europe now use US or Chinese systems. She says this is a weakness Europe needs to address.

Cost is another issue. Retailers report that card network fees have risen sharply in recent years. Direct bank payments could increase competition and help both businesses and consumers save money.

For EU leaders, the stakes are bigger than a digital wallet. Payments, they argue, are infrastructure, and infrastructure is power.