Three Ways the EU’s Payment Sovereignty Strategy Undermines European Consumers

The Chair of the European Parliament’s Committee on Economic and Monetary Affairs, Aurore Lalucq, delivered a speech this week lamenting that “almost all our payment systems today are American,” worrying that President Trump might suddenly “cut off” Europe, and urging the creation of “an Airbus of payment systems.” Her call for Europe to wean itself off Visa and Mastercard would be a misguided policy for at least three reasons.

First, there is no evidence that Trump has sought to force these payment services to cease doing business with Europeans, and that prospect remains unlikely. European policymakers had identical fears when Trump withdrew from the Iran deal in 2018, which led to establishing the European Payments Initiative (EPI), a consortium of major European banks aimed at creating a pan-European payment solution. Seven years later—through two Trump administrations, trade wars, and transatlantic tensions—American payment networks continue operating in Europe without interruption because cutting off payment infrastructure would harm American commercial interests as much as European ones—Visa and Mastercard earn billions annually from European transactions. Policymakers should respond to real problems, not hypothetical ones.

Second, Europe has already produced a payments champion, but it drove it out. Stripe, which was founded by Patrick and John Collison, two brothers from Limerick, Ireland, processed $1.4 trillion in payments in 2024, was founded by Patrick and John Collison—two brothers from Limerick, Ireland. By comparison, Wero, the EPI’s state-backed instant payment service, launched in 2024. Stripe is dual-headquartered in Dublin and San Francisco, but the Collisons moved to California because, as they wrote in their 2025 annual letter, Europe needs “major regulatory reform and simplification.” They explain that “the inadvertent result” of European policy has been “to discourage the creation or success of new firms.” Therefore, the problem is not that American firms have a stranglehold on the market, but that European regulation has pushed Europe’s most successful payment founders to San Francisco. Why does Europe forget her own sons?

Third, the beneficiaries of an “Airbus of payment systems” would be French banks, not European consumers. The EPI has 16 bank shareholders, including all the major French ones: BNP Paribas, Crédit Agricole, Société Générale. These banks would likely prioritise protecting their existing domestic card fee revenue over investing in a pan-European competitor that would cannibalise their own margins. Indeed, according to the European Central Bank, one of the reasons previous attempts at pan-European payment systems failed is that “banks’ commercial interests prevailed.”

A state-backed payment scheme would entrench this dynamic: French banks would capture regulatory rents through transaction fees while German and other European consumers subsidise infrastructure that primarily serves French commercial interests. If the Commission wants lower payment costs, it can get them using existing tools: Interchange caps already limit fees on card transactions to 0.2-0.3 percent of the transaction value, and the EU’s Payment Services Directive (PSD2), which requires banks to allow third-party payment provides to access customer accounts, already enables customers to transfer money directly between bank accounts without using card networks. These tools reduce costs without fragmenting infrastructure or forcing consumers onto inferior platforms.

Sovereignty proposals for payment systems would not address a real threat, they would not solve the underlying regulatory problems afflicting the European market, and they would not improve consumer welfare. Instead, they would only act as a protectionist handout for legacy European banks.

Image credits for social media preview: Craig Nagy/Flickr