Europe without Visa and Mastercard: How the EU is building an alternative to the US giants

Since the beginning of this year, European officials and businessmen have been actively calling for the creation of their own alternatives to the American payment systems Visa and Mastercard. This topic is "fueled" by the cooling of relations between the US and the EU. To reduce dependence, the EU plans to launch its analog of international payment systems based on the digital euro. A representative of the ECB and an assistant to a MEP told Oninvest the details of this work.

Europe "urgently" needs alternatives to the U.S. payment systems Visa and Mastercard, Martina Weimert, head of the European Payments Initiative, said in a recent interview with the Financial Times. She noted that "independence is a matter of time, and we need action now," and emphasized that the two U.S. companies handle about two-thirds of card transactions in the eurozone, while 13 EU countries do not have their own payment systems at all.

In April, the French payment network CB joined these calls, writes the FT. It quotes its head Philippe Laulani: "The current tensions with the US under Donald Trump have underscored the idea that some services can be cut off or provided under certain conditions."

At the center of this system will be the digital euro, and among its participants will be an association of the ECB and the national central banks of the eurozone countries called the Eurosystem. It is not a separate legal entity, but a system of business relationships and technical solutions.

Currently, the ECB has the exclusive right to authorize the issuance of euros, while national central banks physically issue and withdraw banknotes. Decisions on the issuance of the digital euro will also be made by the ECB, and its issuer will be all members of the Eurosystem.

Unlike funds in commercial bank accounts, which are essentially liabilities of that bank, the digital euro is a liability not only of commercial banks but also of the central bank to money holders.

According to the regulator's materials, the Digital Euro Service Platform (DESP) will be created for the digital euro, through which banks and payment providers will conduct transactions, manage wallets and interact with each other. The Eurosystem is the customer and controller of the platform architecture.

DESP is being built on top of TARGET, an existing European express transfer system. Now it is used only by banks - for them it is a real-time settlement mechanism through debiting and crediting their accounts with the central bank. With the digital euro, the Eurosystem will conduct settlements, in essence, with central bank money, but in the retail segment.

It is planned that for the user, payment will take place as it does now: you can pay with a card or smartphone, as well as with an e-wallet.

To pay with the European equivalent of Visa or Mastercard, a person will first need to open a digital euro account at his or her bank or payment provider. When making a payment, the system will check the balance in digital euros and, if necessary, automatically "pull" the missing amount from a regular bank account using a "reverse waterfall" mechanism, says the ECB representative: in essence, this is an automatic transfer from a commercial bank account into digital euros at the time of payment.

Among the payment instruments will be special cards with a built-in power source - a battery or rechargeable battery. This will make it possible to pay even if there is no internet signal, Oninvest found out after studying the draft ecosystem rules(rulebook). Ordinary cards are powered by the terminal field: as long as there is contact with the POS and communication with the backend, the payment goes through.

There will also be an option to pre-"load" the digital euro into an offline wallet on your phone or a separate card for payments without internet - essentially, it will work like a prepaid card.

The European Commission presented a project to launch a digital euro almost three years ago, on June 28, 2023, but so far it has not been given the go-ahead. Until recently, the EU lacked the political will to adopt it, an aide to a German MEP told Oninvest on condition of anonymity. Against the backdrop of European Parliament elections, changes in the composition of committees and ongoing negotiations on sensitive issues, there was essentially no one to push the bill forward, explains the Oninvest interlocutor. Now that the leadership and composition of the responsible committees - Economic and Monetary Affairs, Internal Market and Civil Liberties - have changed, there is a better chance that the bill will be agreed, he says.

Oninvest's emailed questions to these committees were not answered.

If the bill can be agreed and passed in 2026, the digital euro pilot could be launched as early as 2027, with the real thing going live in 2029, an ECB spokesman said.

Another problem is that US tech giants, as well as US banks operating in Europe, are very reluctant to give up their technology and lose payments market share, the MEP's aide continues.

For Europe, this means "structural vulnerability": in a crisis situation, the EU has no control over the rules of the game or the risks of shutting down entire segments of the economy. In addition, as Oninvest wrote earlier, European officials were concerned about the adoption of the law on dollar-linked stablecoins in the United States, as this could pose a threat to the spread of the "digital dollar", including in Europe.

The project also affects the interests of Apple and Google. Contactless payments in smartphones work on two key technologies: NFC (Near Field Communication) and Secure Element. NFC is a near-field wireless communication technology and hardware module that allows devices to exchange data when you hold your phone up to a payment terminal. Secure Element is a specially protected chip or, in some devices, a memory area where keys are stored and operations are performed, without which secure payments are impossible.

Two U.S. corporations control access to both technologies. Until recently, third-party payment services could develop their own applications but could not use NFC and Secure Element without Apple Pay or Google Pay being involved in the process.

The EU's Digital Markets Act (DMA) has changed the situation. It actually introduces special obligations for Apple and Google to allow third-party vendors to access key device features, including NFC and Secure Element "on equal terms with their own services" and not to require the use of only their own payment service. The law suggests that tech giants will pay if they refuse to give direct access to their platforms. This is a key element in reducing the technological dependence of European payments on Big Tech, an ECB spokesman said.

The ECB has already held a tender for key suppliers of components of the digital euro platform at the end of 2025. According to the regulator's own data, more than 50 companies have responded to the bids, and framework agreements have been signed with 10 companies.

They were selected to solve five blocks of specific tasks: finding connections for phone number transfers, antifraud and risk management, official app development, secure exchange of payment information, and a hardware offline solution.

All companies are European, and some of them are public. For example, Sapient GmbH and Tremend Software Consulting, which are responsible for searching aliases (transfers by phone number/e-mail), are subsidiaries of the Publicis Groupe holding company. Capgemini Deutschland, which acts as a backup contractor in the anti-fraud block, is part of the Capgemini SE group, one of the world's largest IT consultants.

Thus, it makes sense to look at some players for those interested in investing in the digital euro project. Now the shares of the French Publicis Groupe are trading around €78 per paper, quotations for the year fell by 9.7%. Capgemini shares are quoted at €102, having lost more than 22% of their value over the year.

Joachim Nagel, president of Germany's Bundesbank and member of the ECB Governing Council, linked the digital euro project to investment opportunities.

But investors should realize that work on these agreements will only begin after the European Parliament passes a law on the digital euro, and after the ECB Governing Council gives the project the green light.

Another constraint is the spread of the euro. According to SWIFT data, the share of the European currency in international payments (excluding the euro zone) in February 2026 was just over 14%. By comparison, the dollar had more than 57%.

This article was AI-translated and verified by a human editor