Funding & Finance

Breaking the Visa Mastercard Duopoly

Every time a European taps a card, the transaction travels through infrastructure owned by an American company, and the

By Conor Healy

July 2, 2026

Every time a European taps a card, the transaction travels through infrastructure owned by an American company, and the record of what they bought leaves European jurisdiction in the process.

For years this was treated as a technicality. Brussels now regards it as a strategic vulnerability on the level of energy dependence, and for the first time in decades the Visa Mastercard duopoly is facing a serious, coordinated attempt to build around it.

The challenge is real, and so is the case that it is mostly theatre. Both are worth taking seriously.

Why Do Visa and Mastercard Dominate Payments?

Visa and Mastercard are the two networks that route the majority of the world’s card payments. They do not issue your card or lend you money; your bank does that. What they own is the rails, the system that carries a payment from the shop’s terminal to your bank and back, and they set the rules and fees for using it.

Between them, the two American firms process roughly $24 trillion in transactions a year. In the eurozone they account for about 61% of card payments and very nearly all cross-border transactions. A European buying from a retailer in another European country has, until now, almost always routed that payment through an American network.

That dominance is the definition of a duopoly: two firms, no meaningful third option, and a market so entrenched that challengers have failed for twenty years. Visa generated around $40 billion in revenue in 2025, Mastercard nearly $33 billion. The grip is not an accident but the product of a service that genuinely works, seamlessly, almost everywhere on Earth.

Why Does Europe Want to Replace Visa and Mastercard?

The motive is control more than cost.

European institutions have grown uneasy about depending on foreign infrastructure for something as fundamental as payments. The fear sharpened when Donald Trump returned to the White House with a combative approach to trade, and sharpened further on the precedent of Russia: when the West sanctioned Moscow in 2022, Visa and Mastercard suspended operations there within days. European officials looked at that and asked what would happen if the same lever were ever aimed at them.

There is no evidence that the United States has ever threatened to cut off European access. But sovereignty planning is about capability, not intention, and the capability plainly exists. The chair of the European Parliament’s economic committee has called for Europe to build “an Airbus of payment systems,” a homegrown champion to end the dependence.

European Central Bank president Christine Lagarde has said Europe needs its own digital payment system urgently, warning that nearly all European card and mobile payments currently run on infrastructure the continent does not control. The data, the pricing power, and the off-switch all sit abroad.

What Are the Alternatives to Visa and Mastercard?

The main alternatives are account-to-account systems that move money straight between bank accounts: Wero and the EuroPA national apps (Bizum, Bancomat, MB WAY, Vipps MobilePay) in Europe, plus the forthcoming digital euro, alongside established rails like China’s digital yuan, India’s UPI, and Brazil’s Pix. In Europe specifically, three efforts are converging.

The centrepiece is Wero, a payment app built by the European Payments Initiative, a coalition of major banks. On 2 February 2026, the initiative signed an agreement with the EuroPA Alliance, which links existing national systems including Spain’s Bizum, Italy’s Bancomat, Portugal’s MB WAY, and the Nordics’ Vipps MobilePay. The combined network connects roughly 130 million users across 13 countries, covering about 72% of the population of the EU and Norway.

Wero works without a card. A user sends money straight from their bank account using only a phone number, with no IBAN required, and the transfer lands in under ten seconds. Cross-border person-to-person payments roll out this year, with online and in-store payments following in 2027, eventually under a single European logo at the checkout.

These are not slides in a pitch deck. Bizum alone already has more than 30 million users and processes over 3.4 million transactions a day in Spain.

The third strand is the digital euro, the ECB’s own electronic cash, designed to sit alongside banknotes. If the legislation passes by the end of 2026, retail payments could begin around 2029, with merchants required to accept it. Supporters argue it could become the foundation on which a true European rival to Visa and Mastercard is finally built.

This Is Not Just a European Story

The card networks are being routed around in more places than Brussels.

China has already deployed its digital yuan at scale, a state-controlled rail that bypasses Visa and Mastercard entirely. India’s UPI system has turned account-to-account transfers into the default way a billion people pay, largely cutting cards out of domestic commerce. Brazil’s Pix did the same almost overnight, becoming the country’s dominant payment method within a few years of launch.

The common thread is account-to-account payment, money moving directly between bank accounts rather than through a card network sitting in the middle and charging a toll. Wero is Europe’s version of a model that is already winning elsewhere. The duopoly’s home turf, the developed-world card payment, is the last big market where the old model still rules unchallenged.

The Case Against the Panic

A fair reading has to include the argument that this is sovereignty theatre dressed as strategy, because that argument is strong.

Start with the trigger. There is no record of the US government ever threatening to switch off European card access, and doing so would devastate American firms that earn enormous revenue from Europe. The Russia comparison is misleading, because that was a sanctioned aggressor state, not a close ally and major trading partner.

Then there is the service gap. A Visa card works in Tokyo, New York, and São Paulo. A Wero payment, for the foreseeable future, will not. For the world’s most travel-heavy, trade-dependent economy, swapping a global network for a regional one carries a real cost that the sovereignty framing tends to skip.

There is also the question of who benefits. The banks behind the European Payments Initiative include giants like BNP Paribas and Deutsche Bank, and a state-backed system that nudges consumers off cards conveniently routes them onto bank-owned rails instead. A previous pan-European attempt, the Monnet Project, collapsed in part because the banks’ commercial interests crowded out consumers’. Europe also already caps card interchange fees at 0.2 to 0.3%, so if the goal were simply cheaper payments, the tool for that already exists.

The sharpest critics argue the goal should not be to replace Visa and Mastercard at all, but to build enough credible competition that no single rail, American or European, can dictate terms. On that view the win is not a European monopoly replacing an American duopoly but the end of anyone holding a monopoly at all.

Can Anything Actually Replace Visa and Mastercard?

Not completely, and not soon. Visa and Mastercard are not about to disappear from European wallets, and any traveller will keep one for the simple reason that it works abroad and Wero does not.

The more likely outcome is the loss of something subtler and, to the networks, more valuable: their position as the only option. Even partial success for Wero changes the negotiation. A European bank that can credibly threaten to route domestic payments through a homegrown rail has leverage it never had before, and leverage is what erodes a duopoly’s pricing power long before any rival matches its reach.

The window will not stay open forever. Every quarter the digital euro stalls and Wero delays its merchant rollout, Visa and Mastercard deepen their integration into European systems and acquire more of the fintech layer that sits on top of them. The duopoly is not being broken so much as put on notice, and whether that notice turns into real competition is the question the rest of this decade will answer.