2026: The year of European sovereignty in payments?

The issue of European sovereignty has been on everyone's mind recently. Among its many dimensions, sovereignty in retail digital payments is often cited as an urgent gap to be filled. In fact, two-thirds of digital payments in the Eurozone rely on non-European providers, mainly American. The situation is not uniform, with marked differences from one country to another. Sovereign solutions are available in 14 EU countries, representing 77% of the population; in 13 countries, there is no alternative to International Card Schemes (ICS). However, this situation is not inevitable, and 2026 could well be the year when a European alternative takes off and reaches critical mass.

The introduction of the euro in 1999 established European monetary sovereignty, resulting from the merger of former national competences within the Eurosystem, in accordance with the provisions of the treaties. It greatly harmonised payments within the Union, but without establishing European sovereignty at all levels of the retail payments chain: indeed, apart from interbank transfers and, to some extent, clearing platforms, the infrastructures have remained either national or operated by non-European actors present in several countries.

Nature abhors a vacuum, and so the solutions offered by the American giants Visa and Mastercard, with their critical mass and international networks, and in the absence of a European alternative, have become the norm, along with Apple Pay, Google Pay and Ali Pay. Their dominance does not undermine European sovereignty in monetary matters, but it does weaken it when it comes to payments: although their activities in Europe are strictly regulated by European Union law, the governance of these networks remains in the hands of foreign companies.

What is the link between payment infrastructures and sovereignty?

Economic literature generally analyses the role of instruments and infrastructures in the efficiency and stability of payment systems separately. However, as it does not address these issues from the perspective of sovereignty, it offers an incomplete framework for understanding contemporary issues. Yet, payment sovereignty depends both on the nature of money and the infrastructures on which it circulates.

Let us first return to the nature of money. Central bank money (banknotes and coins) is the ultimate asset into which other forms of money – bank deposits or electronic money – are convertible at par, ensuring the stability of the system. However, this anchoring role does not imply that it is the most widely used means of payment (King, 2001), even if this may be the case for certain uses. In all advanced economies, this role as the dominant means of payment is fulfilled by commercial bank money, which is more flexible, more abundant and better suited to everyday needs.

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