The EU's quest for financial sovereignty is a hot topic, and it's time to explore the possibilities. With billions of transactions annually, Europe's reliance on US payment schemes has become a cause for concern. Visa and Mastercard dominate the market, processing an astonishing 4.7 trillion USD across the EU in 2023. This overreliance has sparked fears of potential disruption, especially with increasing tensions between the EU and the US.
The European Central Bank (ECB) has warned that losing control of our financial systems means surrendering our economic destiny. EU institutions are now backing initiatives like WERO, a pan-European private-sector project, to encourage payment sovereignty.
Launched in 2024, WERO aims to be a fully-fledged alternative to US payment networks by 2027. It's a digital wallet and instant person-to-person (P2P) payments circuit, designed to complete Europe's payment sovereignty architecture. But can it truly compete with the giants Visa and Mastercard?
Judith Arnal, a senior researcher, believes it's promising but not guaranteed. She emphasizes the need for cost-effectiveness, convenience, security, and proper dispute resolution systems. Arnal also cautions against anti-US rhetoric, suggesting that the EU should build its own alternatives alongside US systems.
Time is of the essence. Despite efforts like the Instant Payment Regulation (IPR) in 2024, Europeans' dependence on foreign payment schemes persists. In 2025, 47% of the eurozone's card payment value still passed through Visa and Mastercard. What was once seen as market efficiency is now recognized as a strategic vulnerability.
EU-US relations are strained, and there are concerns that the US could weaponize its payment circuits to exert pressure. ECB President Christine Lagarde calls it a "political statement concerning the sovereignty of Europe."
The EU has proposed a "European Banking Union" to address fragmentation and centralize banking supervision. This strategy aims to ensure stable and scalable European banks, creating the conditions for European payment solutions. Two pillars are already operational, with the third, a common deposit insurance scheme, still under negotiation.
In parallel, European banks and payment providers are developing rival systems to US services like PayPal. WERO, a private-sector project, allows instant account-to-account payments, bypassing traditional card networks. It launched in 2024 for P2P payments and is now expanding to online commercial payments.
The SEPA instant payments law, effective since April 2024, requires eurozone banks to offer instant credit transfers at the same price as standard transfers. The TIPS instant payment system, operated by the ECB, allows banks to settle instant payments in central bank money in real time.
The highly anticipated Digital Euro project aims to create central bank-issued digital cash for everyday electronic payments. Cooperation with this project is seen as crucial to regaining sovereignty and driving ambition to reality.
According to Francesconi, the biggest loss is not just financial but strategic, impacting control over consumer data, advertising, and growth. Europeans are relying on fragmented national solutions, which undermines the single market's economic competitiveness. WERO aims to create a scale effect, enabling innovation, competition, and efficiency at a continental level.
WERO could strengthen European competitiveness by offering an alternative and increasing competition and resilience. It aims to transform instant account-to-account payments into an everyday solution, benefiting consumers and the ecosystem.
The EU's journey towards financial sovereignty is complex, but initiatives like WERO offer a glimmer of hope. The question remains: Can Europe break free from Visa and Mastercard's grip? What are your thoughts on this crucial issue?
