The debate over Europe's payment sovereignty has intensified, and rightly so. But it has locked onto the wrong target. The familiar argument that Europe is dangerously dependent on two American card schemes has become the headline case for a digital euro. It mistakes the visible part of the system for the vulnerable one. The real exposure is not the card in your pocket. It is the currency behind it.
Payment sovereignty is not primarily about plastic. It is about currency power, legal jurisdiction, and the financial infrastructure that governs how money moves across borders. Europe's true vulnerability lies in the dominance of the US dollar and the extraterritorial reach of US law over global financial markets.
European banks are deeply embedded in dollar-denominated markets—for trade finance, energy, capital markets, correspondent banking, and clearing. The euro accounts for roughly 20% of international currency use, yet a significant share of large cross-border transactions, even between non-US parties, still transits the dollar system. That exposure subjects European institutions to US sanctions regimes, anti-money laundering rules, and extraterritorial legislation, regardless of European political positions. The fines imposed on European banks over the past decade illustrate the imbalance clearly.
The 'kill switch' fear misses the point
A recurring argument is that the United States could one day switch off American payment networks in Europe. That is hypothetical and unlikely. There is no precedent for US authorities threatening to cut Visa or Mastercard services in allied economies; doing so would harm US commercial interests, disrupt global trade, and undermine trust in American-based infrastructure far beyond Europe. If tensions ever ran high enough to make this risk real, the transatlantic relationship would have deteriorated so badly that payments would be the least of Europe's concerns.
The card debate is not baseless, but it is overstated. Card payments are one part of a diverse European system that also runs on credit transfers, direct debits, instant payments, cash, and emerging account-to-account solutions. When all electronic payments are counted, the share of international card schemes falls to a third of all non-cash transactions at EU level—and much less in large markets like France and Germany.
In France, the domestic scheme Cartes Bancaires handles around four-fifths of card transactions, often co-badged with international networks for cross-border acceptance. In Germany, girocard plays a similarly dominant domestic role, complemented by account-to-account and instant payments. These are two of Europe's largest economies, among nine markets running a national card scheme—hardly the picture of total dependence the narrative implies. That said, many member states have no domestic scheme and rely to varying degrees on non-European providers. In the card segment specifically, a majority of domestic transactions at European level currently run through international schemes. Ironically, those non-EU schemes remain the only truly pan-European providers.
The underlying worry is legitimate. Payments are critical infrastructure: they generate growth, underpin daily life, and carry the resilience of states in times of crisis. Recent history proves it—the disconnection of Russian banks from international payment systems, sanctions imposed through financial institutions, the Cuban embargo, and the extraterritorial targeting of European officials. Payments can be leveraged for geopolitical pressure. Questioning Europe's dependencies is not ideological; it is prudent. The task is to aim that prudence at the real dependency.
Pursuing sovereignty does not mean isolation. Europe will continue to depend on global payment solutions for cross-border trade and travel. Initiatives like Wero or the digital euro—promising but not yet fully operational—would not remove the need for international schemes to cover payments outside the euro area. The presence of international payment firms strengthens the market, competition, and innovation. It is a gateway for Europe's citizens and companies to the global transaction space. A sustainable path is a multilayered ecosystem where national, European, and international solutions coexist without fragmentation.
Replacing one payment brand with another changes none of this. It would not change how liquidity is sourced, how transactions are settled, or which legal system prevails in a dispute. Sovereignty cannot be launched as a product; it requires structural change. If Europe wants real payments autonomy, it must increase the international role of the euro. The digitisation of finance offers three levers: developing euro-denominated digital assets and settlement systems, promoting the euro in global commodity and trade contracts, and building a robust European capital markets union to reduce reliance on dollar funding. As Italy's proposal for fee-free digital euro payments shows, the political will exists—but the focus must shift from the card to the currency.
