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Europe is actively developing homegrown alternatives to the dominant U.S.-based card networks Visa and Mastercard. The primary goals are to strengthen payment sovereignty, reduce geopolitical vulnerabilities, lower transaction costs for businesses and consumers, and maintain greater control over sensitive financial data and critical infrastructure.
### Why Europe Wants Its Own Payment System
Reliance on foreign payment networks has become a growing strategic concern for European policymakers and central bankers. A significant portion of eurozone card transactions still flows through Visa and Mastercard infrastructure, even though national schemes exist in several countries. This dependence means that payment data often leaves European jurisdiction, and the entire system could be disrupted by decisions made outside the continent.
The 2022 exclusion of Russian banks from Visa and Mastercard following the invasion of Ukraine served as a wake-up call. European leaders realized that similar measures could one day target EU countries amid trade disputes, political tensions, or shifting transatlantic relations. European Central Bank President Christine Lagarde has repeatedly highlighted the risks of depending on non-European providers—whether American card giants or Chinese digital wallets—stressing that payments are too critical to leave in foreign hands.
Beyond geopolitics, economic factors play a major role. Merchant fees on card transactions have been a point of contention, ultimately raising costs for businesses and consumers. A European system built on cheaper account-to-account (A2A) transfers via SEPA Instant could significantly reduce or even eliminate interchange fees, fostering greater competition in the payments market.
Data sovereignty is another key driver. In an era of strict privacy regulations like GDPR, keeping transaction information within European borders aligns with the EU’s broader digital sovereignty agenda. Fragmented national payment solutions—such as Germany’s Girocard or France’s Carte Bancaire—have long existed but lacked the seamless cross-border scale that Visa and Mastercard provide.
### The European Payments Initiative and Wero
The flagship effort is the **European Payments Initiative (EPI)**, backed by major European banks including BNP Paribas and Deutsche Bank. Its main product, the digital wallet **Wero**, was launched in 2024 and enables instant person-to-person (P2P) and merchant payments directly between bank accounts using simple identifiers like phone numbers.
As of early 2026, Wero had registered tens of millions of users across Belgium, France, and Germany, with reports indicating around 47–50 million users and billions of euros already processed. The wallet supports e-commerce in select markets, with in-store functionality expanding through 2026 and 2027.
In a significant step toward scale, EPI signed a memorandum of understanding in February 2026 with the **EuroPA Alliance**. This alliance connects national payment systems such as Spain’s Bizum, Italy’s Bancomat/PagoBancomat, Portugal’s MB WAY, and the Nordic Vipps/MobilePay. Together, these systems link approximately 130 million users across 13 countries, paving the way for interoperable cross-border payments without relying on U.S. networks. Person-to-person transfers across borders are scheduled to begin in 2026, with broader merchant acceptance targeted for 2027.
### Complementary Efforts: The Digital Euro
Parallel to these private-sector initiatives, the European Central Bank is advancing the **digital euro** project—a central bank digital currency (CBDC) expected to launch around 2029. Designed as a digital form of cash, the digital euro would serve as a public-money complement to private solutions and could integrate with wallets like Wero. EU ministers have accelerated work on the digital euro partly to provide a resilient public infrastructure and further reduce dependence on foreign card networks.
These efforts build upon existing European payment rails, including the mandatory SEPA Instant Credit Transfer scheme, which enables real-time bank-to-bank payments across the eurozone.
### Challenges Ahead
Despite promising progress, creating a credible alternative to Visa and Mastercard is no small task. The U.S. networks offer global acceptance, robust fraud protection, efficient dispute resolution, and powerful network effects that are difficult to replicate quickly. Wero and connected systems must compete on convenience, security, reliability, and cost to gain meaningful market share.
Analysts note that Visa and Mastercard’s dominance has even grown in some European segments in recent years, showing the challenge of displacing entrenched players. The goal for European initiatives is often described not as total replacement but as diversification—creating resilient domestic options that reduce single points of failure while cards remain available for international and non-EU transactions.
### A Global Trend Toward Payment Sovereignty
Europe’s move fits into a broader worldwide pattern. Countries and regions are increasingly building local payment infrastructures to assert control over their financial systems. India’s Unified Payments Interface (UPI), China’s domestic networks, and Russia’s Mir card system are prominent examples of this shift.
With Visa and Mastercard together processing trillions of dollars in annual transaction volume globally, even partial success by European alternatives could reshape the competitive landscape, lower costs, and enhance strategic autonomy for the continent.
The coming years will be decisive. If Wero, the EuroPA Alliance, and the digital euro achieve widespread adoption and seamless interoperability, Europe could significantly reduce its dependence on foreign payment giants. For now, the initiative remains a work in progress, driven by a clear recognition that control over payments is too important to leave entirely in external hands.
