(8 April 2025 – Europe) The European Central Bank (ECB) is calling for a payments revolution to secure financial sovereignty by building its own alternative network to reposition Europe away from established players such as Visa, Mastercard, PayPal, and Alipay.
Describing it as “a march towards independence”, ECB President Christine Lagarde believes a truly unified European Union (EU) capital market would hasten deeper fiscal integration with a potential value add of up to €2.8 trillion in additional GDP by 2032, with at least €321 billion attributed to completing the Economic and Monetary Union.
The Capital Markets Union (CMU) is firmly back on the agenda, representing a long-standing EU initiative to create a single capital market across member states. The goal is to improve the flow of investments and savings across the bloc, giving businesses better access to funding and consumers more efficient savings vehicles.
“Visa, MasterCard, PayPal and Alipay are all controlled by American or Chinese companies. We should make sure there is a European offer. Progress on the CMU for broader economic integration could ease the pressure on monetary policy and lay the groundwork for a future fiscal union” Lagarde stated.
Building a European payments network rival to established incumbents in Visa and Mastercard faces significant challenges, including:
- Lower interchange fees in Europe make profitability harder to achieve.
- Massive upfront investment is needed to create infrastructure that rivals global players.
- Adoption hurdles include shifting consumer and merchant behaviour, and persuading banks to support a new system.
- Technical complexity, especially around security, fraud protection, and cross-border compatibility.
- Governance and coordination, as member states and institutions would need to align on execution and oversight.