The head of the European Payments Initiative (EPI) thinks so, according to a Monday (Feb. 9) interview with the Financial Times (FT).
“We are highly dependent on international [payment] solutions,” said Martina Weimert, chief executive of the EPI, an alliance 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. If we say independence is so crucial and we all know it’s a timing issue . . . we need action urgently,’’ she added.
Visa and Mastercard made up for nearly two-thirds of Eurozone card transactions, the FT said, citing data from the European Central Bank. Thirteen European Union countries have no national alternative to these American companies, while use of the domestic programs that do exist is declining.
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Also declining is the use of cash, which has left EU officials worried that the power of American payment companies could be weaponized during a major breakdown in relations.
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“Deep integration created dependencies that could be abused when not all partners were allies,” Mario Draghi, former ECB president, said in a recent speech. “Interdependence, once seen as a source of mutual restraint, became a source of leverage and control.”
The EPI in 2024 introduced Wero, an alternative to Apple Pay, which has 48.5 million members in Belgium, France and Germany. The program plans to expand to online and in-store payments by 2027, the report added.
Weimert told the FT that banks and merchants were largely aware of the need to develop a cross-border European payments network, but added that the “geopolitical context” meant it was now “becoming a mainstream topic.”
As covered here last year, there is some debate in Europe about the best way to respond to the dominance of American payment companies. The European Central Bank (ECB) has touted the digital euro as a way to protect “our freedom, autonomy and security,” as ECB executive board member Piero Cipollone said in September.
However, the EPI argues that a digital euro could impede private sector payment systems.
“The current design of the retail digital euro largely addresses the same use cases as private solutions, without offering any clear added value for consumers,” the banks said ahead of a November hearing on the matter.
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