The president of the European Central Bank, Christine Lagarde, called for a financial revolution in Europe. She believes that the European Union should get rid of its dependence on US payment systems — such as Visa and Mastercard — by creating its own European alternative, informs Business Today.
In her speech on The Pat Kenny Show, Lagarde called this initiative a “march to independence.” She stressed that all current digital payment systems are under the control of American or Chinese companies, and noted that Europe needs to create its own system to preserve financial sovereignty.
These statements came amid renewed interest in the Capital Markets Union (CMU) project, a long-standing EU initiative to create a common capital market for all member states. According to Lagarde, a fully unified market could pave the way for deeper fiscal integration, with a potential added value of up to 3 trillion euros each year.
According to estimates by the European Parliamentary Research Service, deeper integration could provide more than €2.8 trillion in GDP growth by 2032, of which at least €321 billion would come from the completion of the Economic and Monetary Union.
Despite this, the creation of a European equivalent of Visa and Mastercard is accompanied by significant difficulties. In particular, these are lower commissions in Europe, which makes it difficult to make a profit, the need for large initial investments, difficulties with implementation and adaptation of user and merchant behavior. It is also important to take into account technical security and anti-fraud challenges and coordination challenges between Member States.
We will remind that in September 2024, the European Payment Initiative (EPI) announced the launch of its own Wero payment system, which aims to replace Visa and Mastercard. European financial institutions have been working on its development for several years.
Wero is a peer-to-peer (P2P) money transfer service that works via phone number, QR code or email. Transfers are made in 10 seconds directly between bank accounts without the involvement of intermediaries.
