The President of the European Central Bank, Christine Lagarde, is calling for a revolution in payment systems to end Europe’s dependence on American and Chinese platforms such as Visa, Mastercard, PayPal, and Alipay.
Lagarde emphasized in „The Pat Kenny Show” podcast Europe’s reliance on foreign digital payment infrastructure. „Visa, MasterCard, PayPal, and Alipay are all controlled by American or Chinese companies,” she said.
"We should ensure there is a European offering," added the President of the European Central Bank, calling for a payments revolution to end the European Union's reliance on American and Chinese platforms, as reported by Business Today.
Lagarde described such a move as "a march towards independence," stressing that Europe needs to build its own alternative to ensure financial sovereignty.
A fully unified capital market could pave the way for deeper fiscal integration, with a potential annual added value of up to 3 trillion euros, she added.
Capital Markets Union, the Golden Dream of the EU
Her comments come against the backdrop of renewed interest in the Capital Markets Union (CMU), a long-standing EU initiative aiming to create a single capital market across member states. The goal of this union is to enhance investment and savings flows within the EU, providing companies with better access to funding and citizens with more efficient saving tools.
Lagarde linked progress in capital markets to broader economic integration, stating that this could alleviate pressure on monetary policy and lay the foundation for a future fiscal union.
The figure of 3 trillion euros in annual added value comes from a widely cited Reddit post, but several official estimates suggest a more limited impact.
According to the European Parliament Research Service (EPRS), deeper integration could generate over 2.8 trillion euros as additional GDP by 2032, with at least 321 billion euros attributed to the completion of the economic and monetary union.
Why It's Not Easy to Give Up American Cards
However, building a European alternative to Visa and Mastercard faces serious challenges, notes the cited publication. Among them are:
- Lower interbank fees in Europe make profits harder to obtain.
- Massive initial investments are needed to create infrastructure that can compete with global players.
- Adoption hurdles include changing consumer and merchant behavior and convincing banks to support a new system.
- Technical complexity, especially regarding security, fraud protection, and cross-border compatibility.
- Governance and coordination, as member states and institutions need alignment on execution and oversight.