The High Toll of Europe’s Payment Sovereignty
European policymakers are urging the creation of a sovereign alternative to Visa and Mastercard, driven by the hypothetical fear that Washington might weaponize these financial networks. Yet this push for "payment sovereignty" misdiagnoses the problem. American firms do not dominate the market because of a stranglehold, but because European regulation prevents domestic challengers from scaling at home.
Visa and Mastercard lead the market simply because they have outcompeted their rivals. These networks have operated seamlessly through years of transatlantic political shifts because the commerce they facilitate is mutually beneficial.
Constructing a state-backed alternative—likely favoring legacy banks over consumer efficiency—is a costly solution to a nonexistent crisis. It represents an attempt to erect protectionist barriers for domestic services that few consumers actually want to use. Rather than funding redundant infrastructure, Europe should focus on the regulatory reforms necessary for its own companies to compete globally.
Illustration created with assistance from Google Gemini.
