Europe’s Payment Sovereignty Push Is the Latest Front in the Campaign Against American Tech

European leaders are mounting an ambitious campaign to wean the continent off American payment infrastructure. In January, European Central Bank (ECB) President Christine Lagarde warned on Irish radio that Europe “urgently” needs to reduce its dependence on Visa and Mastercard. Days later, the European Payments Initiative (EPI), a consortium backed by 16 major European banks, signed an agreement with the EuroPA Alliance, a grouping of national payment schemes working to build interoperable alternatives to U.S. card networks, to create a continent-wide payment network connecting roughly 130 million users across 13 countries.

Visa and Mastercard together process approximately $24 trillion in transactions globally every year, including approximately $4.7 trillion in Europe, and card payments account for 56 percent of all cashless transactions in the EU. European officials are now treating this American market presence not as a sign of competitive success, but as a strategic vulnerability to be engineered away.

For Americans, this matters. Visa employs more than 34,000 people and generated approximately $40 billion in revenue in 2025. Mastercard brought in nearly $33 billion. A deliberate, government-backed effort to displace these firms from the European market would have real consequences for American workers, shareholders, and the broader U.S. economy.

The driving narrative behind payment sovereignty is fear that the United States might one day “switch off” European access to Visa and Mastercard, as Western sanctions did to Russia after its invasion of Ukraine. The Chair of the European Parliament’s Committee on Economic and Monetary Affairs has called for Europe to build “an Airbus of payment systems” to guard against this scenario.

But this fear is not grounded in reality. There is no evidence that the U.S. government has ever threatened to cut off European access to American payment networks, and doing so would directly harm U.S. commercial interests. Through two Trump administrations and multiple trade disputes, American payment networks have operated in Europe without interruption.

Europe already has tools to address payment costs without building a state-backed competitor. EU interchange fee caps limit card transaction fees to 0.2 to 0.3 percent. If the goal were lower costs, European policymakers could strengthen these existing frameworks rather than spending billions on a government-subsidized alternative.

The primary beneficiaries of a state-backed payment system would not be consumers but incumbent European banks. EPI member banks include BNP Paribas, Crédit Agricole, and Deutsche Bank. Previous attempts at pan-European payment systems, including the Monnet Project launched in 2008, failed precisely because, as the ECB itself has acknowledged, banks’ commercial interests took priority over consumer needs.

The payment sovereignty push is part of a broader European “digital sovereignty” agenda that has produced a wave of discriminatory policies targeting American technology companies. EU regulatory fines against American tech firms totaled $6.7 billion in 2024, an amount equivalent to roughly one-fifth of the EU’s entire tariff revenue. The EU designed the Digital Markets Act with thresholds that capture five U.S. companies while largely exempting European competitors.

The payment campaign follows the same logic: where regulation cannot directly constrain American payment companies, European policymakers are using public funds, regulatory mandates like the digital euro, and institutional coordination to build a subsidized competitor. The mechanism differs, but the objective is the same: reduce European dependence on successful American companies, not because they are failing consumers, but because they are American.

Whenever Western governments fragment markets or weaken the global position of American companies, the primary strategic beneficiary is China. Beijing maintains a growing fintech presence through Alipay and WeChat Pay. A fragmented European payment landscape creates exactly the kind of opening that Chinese state-backed competitors are positioned to exploit.

The Trump administration has recognized this broader threat. The President posted on social media last year that “Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology.” Commerce Secretary Lutnick and U.S. Trade Representative Greer have pressed European counterparts to reassess EU digital regulations.

American policymakers should be paying close attention to Europe’s payment sovereignty campaign because it signals a deepening European commitment to displacing American companies from key sectors of the digital economy through government-directed industrial policy. Payment networks are critical financial infrastructure, and a coordinated effort to replace them deserves the same scrutiny that the United States applies to discriminatory regulations in search, cloud computing, or app stores.

The administration should make the removal of discriminatory digital policies a priority in every trade negotiation and ensure that access to American technology partnerships and investment is conditioned on commitments to nondiscriminatory, open digital markets.

Visa and Mastercard built their European market position by offering a service that works seamlessly across borders, something European alternatives have repeatedly failed to achieve. The right response to that competitive success is not a government-funded campaign to replace it. And the right American response to that campaign is to ensure it does not go unanswered.