Warnings Against Europe's Dependence on American Visa and Mastercard

SadaNews - The CEO of the European Payment Initiative, Martina Weimert, warned of Europe's significant reliance on payment systems through American companies Visa and Mastercard.

Weimert stated in an interview with the Financial Times that Europe has good local payment cards, but "we do not have anything that is cross-border."

The European Payment Initiative is a union that includes 16 European banks and financial service companies.

Weimert added, "If we say that independence (for Europe) is crucial, especially at this time, we need to move urgently."

The newspaper explained that American companies "Visa" and "Mastercard" control about two-thirds of card transactions in the Eurozone, according to data from the European Central Bank for 2022, while 13 European countries lack a significant local alternative to Visa and Mastercard cards.

She added that even in European countries that have local payment cards, their usage is decreasing significantly due to their heavy reliance on Visa and Mastercard.

Concerns About American Pressure

The Financial Times noted that with the decline of cash usage in financial transactions and the increasing dependence on payment cards, "European officials have become more concerned about the possibility of American payment companies using their power as a weapon" if relations with the United States deteriorate.

The newspaper reported a warning from Mario Draghi, the former president of the European Central Bank and former Prime Minister of Italy, in a recent speech that "the interconnectedness (between Europe and the United States), which was once seen as a source of shared strength, has now become a source of control and influence," explaining that “deep integration creates a dependency that can be exploited.”

In this context, Martina Weimert confirmed to the newspaper that there has been a "long-standing awareness" of the need for a "cross-border European payment network," adding that geopolitical changes have made this issue a "major topic."

Mario Draghi warned that Europe's dependency on America has become a tool for pressure (French).

The Ability to Isolate Europe

On January 26, the British newspaper The Guardian published an editorial titled "Europe's Sovereignty Begins with Payment Systems," in which it noted a warning from center-left French politician Aurélie Lalucq that former President Donald Trump has the capacity to financially isolate Europe from international payment systems.

The newspaper explained that the United States, through Visa and Mastercard, has the capacity to financially isolate Europe if its policies contradict Trump's policies.

The newspaper cited American sanctions on Russia after the war in Ukraine as evidence of the danger of financial dependency, as Washington was able, through the two companies, to paralyze 60% of financial transactions in Russia, depriving citizens of access to their funds and preventing them from purchasing their basic needs.

The newspaper emphasized that building a payment system specific to Europe is necessary to "ensure sovereignty," noting that India was able to build a unified payment system within a decade, which is independent from foreign companies and low-cost.

It added that India's success in mainstreaming digital payments, even among poorer segments, proves that building a sovereign alternative to American companies is possible, despite the institutional complexities facing the European Union and the resistance of banks and private companies.