Europe is pursuing an independent payment system as an alternative to the dominance of Visa and Mastercard, driven by concerns over payment sovereignty, geopolitical risks, high costs, and data control. This effort has gained significant momentum in recent years, culminating in the rise of initiatives like the European Payments Initiative (EPI) and its flagship product, Wero.
The Dominance of Visa and Mastercard in Europe
In the eurozone and across much of the European Union, Visa and Mastercard handle the majority of card-based transactions—often cited as processing nearly two-thirds of card payments. These U.S.-based networks route trillions of euros in annual volume through their infrastructure, with consumer and merchant data frequently processed on servers outside Europe. While reliable and globally accepted, this reliance creates vulnerabilities: potential exposure to foreign political decisions, sanctions, or service disruptions. European leaders, including officials from the European Central Bank (ECB) and the European Payments Initiative, have repeatedly described this dependence as a strategic risk in an era of rising geopolitical tensions.
Core Reasons for Seeking an Alternative
Several interconnected factors explain Europe’s push:
- Payment Sovereignty and Geopolitical Resilience
Reliance on non-European payment networks means Europe could face restrictions or interruptions if transatlantic relations deteriorate or if external pressures arise. ECB warnings and statements from EPI executives emphasize that payments are critical infrastructure—similar to energy or defense—and must remain under European control to avoid being “weaponized.” Recent discussions, amplified by global events, have underscored the need for independence to safeguard economic stability. - Reducing High Costs for Merchants and Consumers
Visa and Mastercard charge interchange fees and network fees (typically 1-3% per transaction), which burden European merchants and indirectly raise prices for consumers. An alternative built on account-to-account (A2A) transfers—using instant SEPA payments—could bypass these intermediaries, enabling lower-cost, direct bank-to-bank transactions for domestic and cross-border euro payments. - Data Privacy and Regulatory Alignment
Processing payments through foreign networks often sends sensitive European data abroad, clashing with strict EU rules like GDPR. A homegrown system keeps data within Europe, enhancing privacy, security, and compliance. - Fostering Competition and Innovation
The EU aims for a more fragmented yet competitive landscape, where multiple payment rails (global cards, local A2A systems, and potentially a digital euro) coexist. This reduces monopoly power and encourages innovation tailored to European needs.
The Leading Initiative: EPI and Wero
The most prominent private-sector effort is the European Payments Initiative (EPI), a consortium of major European banks (including BNP Paribas, Deutsche Bank, and others) and payment providers. Launched to create a unified, sovereign payment solution, EPI introduced Wero—a digital wallet—in 2024.
Wero initially focused on instant person-to-person (P2P) transfers using phone numbers (no IBAN required), launching in Germany, France, and Belgium. It has grown rapidly: by early 2026, it has attracted over 43 million registered users, processed billions in transfers (e.g., over €7.5 billion in the first year), and expanded features like subscription management and buy-now-pay-later options.
Key 2026 developments include:
- Phasing in national systems, such as rebranding iDEAL (Netherlands’ popular online payment method) to iDEAL | Wero starting early 2026, with full integration by 2027-2028.
- Rollout of e-commerce payments (already live in some markets, expanding across core countries).
- NFC-enabled point-of-sale (POS) contactless payments planned for later in 2026.
- Interoperability with the EuroPA Alliance (encompassing systems like Bizum in Spain, Bancomat in Italy, and Vipps MobilePay in the Nordics). A February 2026 memorandum of understanding aims for cross-border P2P payments in 2026, followed by broader commerce in 2027, potentially connecting around 130 million users across 13+ countries via a central hub.
National schemes like Paylib, Giropay, and Payconiq have been or are being decommissioned in favor of Wero, signaling a shift toward unification.
Complementary Efforts: The Digital Euro
The ECB’s digital euro project—a central bank digital currency (CBDC)—serves as a public-sector complement. It could provide a universal, risk-free backstop for payments, with legislative progress (e.g., European Parliament support in early 2026) targeting a potential 2029 launch. While not a direct replacement for cards, it bolsters overall resilience.
Challenges Ahead
Building a scalable alternative requires massive investment (billions of euros), widespread merchant adoption, seamless user experience, and competition against entrenched networks. Success depends on achieving critical mass, especially at physical checkouts and online retail. Some experts advocate for fostering multiple competing systems rather than a single dominant one.
As of March 2026, Europe’s payments landscape is at a pivotal moment. With Wero gaining traction and interoperability accelerating, the continent is actively building sovereign infrastructure to reduce dependence on Visa and Mastercard—prioritizing control, cost efficiency, and long-term resilience in its digital economy.
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