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A new report on the state of the European card payments market suggests that the EU’s continued dependence on international card schemes and foreign-owned payment processors is a threat to the bloc’s financial sovereignty.
The findings highlight the dominance of non-EU entities in facilitating electronic transactions across Europe, fueling calls for greater strategic autonomy in payments.
The report reveals that card payments accounted for 54 percent of all non-cash transactions in the EU in 2023, with nearly 70bn transactions recorded.
However, international card schemes, predominantly based outside the EU, controlled around 61 percent of euro area card payments in 2022, leaving national schemes with a shrinking market share.
When considering transactions beyond the euro area, the share of national schemes drops further to 36-37 percent.
There are currently only nine national card schemes operating within the EU, a decline from previous years.
Several euro area countries, including Spain, no longer have national card schemes (although Spain does have Bizum, a major mobile payments provider). Other countries, such as France, have seen their domestic card schemes lose relevance.
This trend indicates a growing reliance on foreign payment networks, particularly in countries where international card schemes already dominate.
Payment processing concerns
In addition to card schemes, the report highlights concerns about payment processing.
Although 80 card processing providers operate in the EU, the market is highly concentrated, with four major cross-border firms — Nexi, Adyen, Global Payments and Worldline — currently dominating the space.
Many of these processors have foreign ownership, with Germany and Sweden reporting the highest number of processors controlled by US-based investors.
The study also warns of the risk of over-reliance on external entities for essential financial services, which could affect the EU’s ability to maintain financial stability and control over its payments infrastructure.
Whereas most domestic processors operating within a single EU country are EU-owned, those with operations spanning multiple member states are largely owned by non-EU investors.
With payments a critical pillar of the financial system, the report calls for closer monitoring of these trends and emphasises the need for a European solution to ensure greater independence in card payments.
The findings align with the European Central Bank’s (ECB) retail payments strategy, as well as its continued promotion of the digital euro.
For example, Piero Cipollone, ECB digital euro lead and board member, said at the Crypto Asset Lab Conference last week that “our reliance on non-European solutions weakens our strategic autonomy and is a drag on productivity growth”.
“We should ask, for example, why we don’t have a European Visa or Mastercard,” he said.
“A digital euro, that is, central bank money in digital form for retail transactions, would give us the chance to increase efficiency, competition, innovation and resilience while allowing European private payment solutions to scale up and protect our monetary sovereignty.”
The ECB’s enthusiasm for the digital euro contrasts with the attitude to central bank digital currencies (CBDCs) in other jurisdictions. Work on retail CBDCs has slowed in Canada and Australia, and the Trump administration has instituted an outright ban in the US.
