European payments groups join forces to challenge US dominance

European payment groups, including Bizum from Spain, Bancomat from Italy, and Wero based in Brussels, have united to establish a cross-border payments network. This move aims to reduce Europe's reliance on Visa and Mastercard, as policymakers prioritize payments sovereignty due to the fragmented global order. The new joint venture, the European Network for Payments (ENP), will be headquartered in Madrid and integrate national payment systems.

ENP's founders collectively serve approximately 130 million users across 13 European countries, representing over 70% of the EU and Norway's population. In Ireland, Zippay enables instant payments using only a mobile phone number between different banks. The network will connect existing payment systems through a unified technical and operational layer based on European standards and facilitate instant account-to-account payments.

The European Central Bank's plans for a digital euro by 2029, an online wallet guaranteed by the ECB but operated by private entities like banks, might complement ENP's efforts. Martina Weimert, CEO of the European Payments Initiative, noted that fragmentation has been a significant challenge for European payment schemes. Fernando Rodriguez, Bizum's deputy general manager for international expansion, confirmed that ENP has appointed a new CEO and is planning staff recruitment.

ENP will incur operating costs in the early stages as the company builds infrastructure to generate sufficient fees. Shareholders will need to absorb these costs. Other European payment schemes may join ENP in the future, with a phased rollout starting with cross-border person-to-person payments, followed by e-commerce and point-of-sale transactions.

Marcel Hörauf, a partner at law firm Mayer Brown, emphasized that the success of ENP in achieving meaningful EU payment sovereignty depends on how Europe's payment regulations evolve, merchant acceptance, and political support from EU member states.