American companies dominate the invisible system that facilitates global payments. Tap a card in a Paris cafe, and, within seconds, a chain of messages travels between banks and processors to approve the purchase — usually via Visa Inc. and Mastercard Inc., which together handle the bulk of Europe’s credit and debit card payments.

That dependence is drawing fresh scrutiny, with Washington increasingly wielding control over financial infrastructure as a geopolitical tool. Europeans are stepping up efforts to build alternatives, warning the region has ceded too much authority over a critical part of its economic system. “We no longer live in a stable and predictable world,” French President Emmanuel Macron said at a recent Paris conference focused on payments, pointing to “extraterritorial decisions that can drastically alter the landscape.” He’s argued that mastering payments is essential to Europe’s economic sovereignty.

The concern has been building for years. When the Trump administration withdrew the US from the Iran nuclear deal in 2018 and reimposed sanctions, European companies pulled back from Iran, because they risked losing access to the American market and financial system. In 2022, Visa and Mastercard cut off Russia within days of its invasion of Ukraine, as did Swift, the Belgium-based messaging network underpinning global transfers, which is overseen by the Group of 10’s central banks.

For some Europeans, the risks are no longer abstract. Nicolas Guillou, a French judge at the International Criminal Court, was blocked from everyday financial ­activities last year after the US imposed sanctions on him for authorizing arrest warrants for Israeli Prime Minister Benjamin Netanyahu and former Minister of Defense Yoav Gallant. He and his colleagues have been forced to disconnect from technology and “live as if we’re in a time machine — back in the ’90s,” says Guillou, whose experience has drawn widespread attention.

Building independent systems wouldn’t necessarily shield Europe from such penalties — its banks remain deeply intertwined with American finance — but it could reduce day-to-day vulnerabilities and give the region greater control over sensitive data. “The more we concentrate our transactions through their payment systems, the more they will be able to oversee the global economy,” says Cecilia Rikap, an associate professor in economics at University College London who specializes in digital sovereignty and economic dependence. “This can also be weaponized.”

That logic partially underpins the European Central Bank’s push for a digital euro, which it began exploring in 2020 as a way to strengthen payments independence. Progress has been slow, however, with a potential launch not expected before 2029.

In the meantime, financial institutions have moved ahead with private-sector alternatives. The European Payments Initiative, backed by 16 regional banks and financial service providers, launched its Wero digital wallet for peer-to-peer transactions in 2024. It has attracted more than 53 million users across Germany, France and Belgium. The service enables instant account-to-account payments via phone number or QR code, effectively cutting out the international card networks while positioning it as a European rival to providers such as PayPal Holdings Inc. It will be active in Luxembourg and the Netherlands soon, with in-store payments planned for late 2026. It’s also teaming up with payment solutions in Italy and Spain, among other places, to expand cross-­border functionality. “Within the next three to four years, it is likely that Wero or similar services will offer Europeans a real ­alternative,” BNP Paribas SA’s chief executive officer, Jean-Laurent Bonnafé, said at a Paris event in May. “We are regaining autonomy in terms of performance as well as price competitiveness.”

An earlier attempt to build a pan-­European alternative, the Monnet project, collapsed more than a decade ago when banks failed to agree on a viable model, and the EPI itself scaled back ambitions for a unified card. One obstacle is the patchwork of domestic schemes, including France’s Cartes Bancaires and Germany’s Girocard, which work well in their home countries but not across borders, leaving consumers to rely on Visa or Mastercard when they make purchases abroad. “The building blocks needed for true payment sovereignty are not lacking, but they have long been fragmented,” says Yves Tyrode, chief digital and payments officer at Groupe BPCE, France’s second-largest banking group.

Moreover, payment schemes exhibit powerful network effects. The more merchants that accept a card, the more valuable it becomes to consumers. Visa and Mastercard have spent decades building their networks, investing billions in infrastructure, fraud prevention and merchant relationships in nearly every country on Earth. “You have to be really an order of magnitude better to displace,” says Eric Grover, an independent payment consultant who previously worked at Visa. “You can’t come in and say, ‘I’m 5% more secure, 10% more secure.’ ”

American payment firms are taking note of the changing winds, though. Mastercard Vice Chair Tim Murphy says geopolitics were a tailwind for decades, but now the weather is “much more mixed.” And Visa CEO Ryan McInerney acknowledged on a recent call with analysts that more competition is likely to come in Europe and elsewhere. Still, the company recently announced new investments in the continent, including for a euro-zone data center, signaling its commitment to the market. According to research firm Datos Insights, 77% of Europe’s digital payment volume ran on card rails in 2025, with the majority using Visa or Mastercard.

Several countries, particularly in Asia, have already developed alternatives to US payment networks, often built around domestic “super apps” that combine payments with other services. China’s Alipay is the most prominent example, with QR-code payments that are accepted globally; Southeast Asia’s Grab Holdings Ltd. has rolled out a similar model across eight countries.

India has rapidly scaled its state-­sponsored Unified Payments Interface, which enables instant bank-to-bank transfers and handles billions of transactions each month. Saudi Arabia’s mada network is central to its push toward a cashless economy, and the United Arab Emirates has launched a domestic card scheme named Jaywan alongside international networks. Efforts are also emerging to link systems across borders, including discussions among BRICS countries and their allies on connecting domestic payment systems into a cross-border framework that would facilitate trade in local currencies and reduce reliance on dollar-­based infrastructure.

In the UK, initiatives include new domestic, bank-owned payment infrastructure and the growth of “pay by bank” services, which allow merchants to bypass card networks altogether. Providers such as London-based TrueLayer Ltd. are already working with Amazon.com Inc., eBay Inc. and other major retailers to offer these options at checkout. “As long as our economy runs on rails operated by two US companies, Visa and Mastercard, we don’t have true sovereignty over our economic infrastructure,” says TrueLayer’s CEO, Francesco Simoneschi.

European companies pursuing a share of the payments market may help increase competition and save businesses and consumers money. Since merchants can’t refuse Visa and Mastercard without risking losing sales, that gives the networks the power to charge high fees. “Europe needs its own technology, so as to no longer depend on the pricing of two independent American players,” says Pierre Fersztand, BNP’s global head of cash management, payments, trade solutions and factoring.

Policymakers fear digital payments — including dollar-backed stablecoins, which help customers use cryptocurrency for financial transactions — could extend US influence into a new generation of payment infrastructure. The European Union is trying to contain those risks by imposing strict rules on stablecoin issuance and use, and some European banks plan to issue euro-­denominated variants as a way to build competing rails more quickly.

With many of those alternatives years away from widespread use, the sanctioned ICC judge Guillou has had to improvise to keep his life running — he’s even ordered a checkbook, a payment method that’s largely vanished from everyday life. But he sees a wider irony. “What is interesting in the end is that these sanctions, in fact, are primarily detrimental to American economic actors,” he says. “Those who will lose market share because of what is happening to European citizens like me will be Visa and Mastercard. That is the paradox of the US action — it’s shooting themselves in the foot.”

Gani, Cohen and Smith report on finance from London, Paris and New York, respectively.

— By Aisha S Gani, Claudia Cohen and Paige Smith (Bloomberg News)