Europe "urgently" needs to reduce its dependence on American groups such as Visa and Mastercard, said Martina Weimert, head of the EPI banking alliance, amid warnings from officials that their market dominance could be weaponized if transatlantic relations deteriorate, the Financial Times reports, writes UNN.
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"We are heavily dependent on international [payment] solutions," said Martina Weimert, CEO of the European Payments Initiative (EPI), a consortium of 16 European banks and financial companies.
"Yes, we have good national assets, such as domestic [payment] card systems... but we have nothing cross-border," she pointed out.
"If we say that independence is so important, and we all know it's a matter of time... we urgently need action," the official noted.
According to European Central Bank data, Visa and Mastercard accounted for almost two-thirds of card transactions in the eurozone in 2022, with 13 member countries lacking a national alternative to American payment systems. Even where domestic payment systems exist, their use is declining, the publication writes.
As cash use declines, European officials are increasingly concerned that the influence of American payment companies could be weaponized in the event of a serious deterioration in relations, the publication notes.
This is one of several critical areas where officials fear the bloc has become too dependent on American companies. The head of the Belgian cybersecurity service recently warned that Europe has "lost the internet" due to the dominance of American tech giants.
"Deep integration has created dependencies that can be abused when not all partners are allies," former ECB President Mario Draghi warned in a recent speech. "Interdependence, once seen as a source of mutual deterrence, has become a source of leverage and control."
The European Payments Initiative (EPI), which includes BNP Paribas and Deutsche Bank, launched Wero, a European alternative to Apple Pay, in 2024. This digital payment system currently has 48.5 million users in Belgium, France, and Germany, and plans to expand its use to online and in-store payments by 2027.
Weimert said that banks and merchants were largely "aware" of the need for a cross-border European payment network, but the "geopolitical context" means that this is now "becoming a major topic."
The ECB said that private sector initiatives in the past, including an earlier EPI plan to launch a competing card system, "showed difficulties in scaling," with a spokesperson noting that "participants found it difficult to agree on common standards."
The central bank is promoting the digital euro – a public initiative for digital payments in the eurozone – with the aim of strengthening the bloc's monetary sovereignty.
Piero Cipollone, an ECB board member responsible for the project, emphasized its importance last week. "As European citizens, we want to avoid a situation where Europe is overly dependent on payment systems that are not under our control," he said.
The project is divisive among European politicians, and some lenders are lobbying against it, arguing that it will undermine private sector efforts. A vote in the European Parliament later this year is likely to be a close contest, the publication writes.
By 2029, when the ECB plans to start issuing tokens, merchants in the eurozone must accept digital euros in stores and online. The basic infrastructure will also be open for development by private initiatives.
The digital euro could "lay the groundwork on which, once consolidated, the equivalent of a European Visa or Mastercard could potentially be built," said Aurore Lalucq, chair of the European Parliament's economic committee and a proponent of the project.
However, Weimert warned that if geopolitical tensions escalate, the digital euro might come too late.
"The problem with the digital euro is that it will come in a few years, perhaps after [US President] Donald Trump's term ends. So I think we are somewhat short on time," she added.