East Coast vs the European Union: What the Push to Replace Visa and Mastercard Means for the Payments Market

The European Union is taking payment sovereignty seriously. Regulators are moving to reduce dependence on global card networks—especially Visa and Mastercard, which currently process up to two-thirds of card transactions in the Eurozone. In response, the EU has launched the European Payments Initiative (EPI), a project to build a unified European payments system, including the Wero digital wallet and instant account-to-account transfers.

Why Europe is pushing out Visa and Mastercard

This move is not just economic—it’s strategic and geopolitical:

• Financial sovereignty: The EU wants to control the infrastructure through which trillions of euros flow.

• Fees and leverage: Retailers report fee hikes—card commissions rose 34% from 2018 to 2022.

• Data and jurisdiction: Europe wants to keep consumer data within the EU’s legal framework.

• Russia’s precedent: The post-2022 exit of Visa/MC from Russia showed the dangers of external reliance.

EPI brings together more than 16 banks and fintech firms, including BNP Paribas, Worldline, and Nexi. Its core mission is to offer a scalable, pan-European alternative to global schemes.

What Visa and Mastercard stand to lose

Europe is a key market for both: their combined card transaction volume exceeds €7 trillion annually. Their revenue model depends on fees, and EPI directly threatens that stream. It’s not just about market share—it’s about protecting their global dominance.

Both companies are investing in open banking and real-time payments to remain relevant. But in Europe, political resolve and regulation are now stacked against them.

Implications for banks and fintechs

Banks are both investors and stakeholders in EPI. They see a chance to reduce costs and regain partial control over payments. But onboarding comes with CAPEX: infrastructure, risk, and potentially lower interchange revenues.

Fintechs get an opportunity to integrate directly with new rails and bypass Visa/MC. A unified European platform could ease expansion across the EU. Still, risks include technical fragmentation and dependency on a centralized ecosystem.

What retailers stand to gain

Merchants may benefit most from breaking the duopoly. Card acceptance fees are a major cost center. Retailers, especially large ones, want alternatives with lower fees and more transparent terms.

But a transition depends on consumers. If customers don’t adopt the new wallet or cards, retailers won’t prioritize the switch. Convenience and trust will determine success.

Key barriers

• User habits: Europeans are comfortable with Visa/MC and Apple Pay.

• Profitability: Low interchange caps in the EU make monetizing a new scheme difficult.

• Technical complexity: A new network must match or exceed existing reliability and security.

• Political coordination: 27 EU member states don’t always move in sync.

Geopolitical dimension

Europe is trying to avoid being squeezed between U.S. tech (Visa, Mastercard) and Chinese fintech giants (Alipay, UnionPay). EPI and the digital euro represent a third path: a sovereign, European-controlled system that can scale domestically and internationally.

The EU isn’t just challenging Visa and Mastercard—it’s redesigning the foundations of its entire payment system. The transition won’t happen overnight, but it’s already reshaping the market. Banks, fintechs, and merchants that adapt early will find opportunity; those clinging to the old model may lose relevance.

Success depends on execution, user adoption, and regulatory support. If Europe gets this right, the payment landscape will be more competitive, innovative, and resilient. If not—Visa and Mastercard will only entrench their dominance further.

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