{
  "id": 9540340,
  "title": "Europe’s payment sovereignty problem is not what we think",
  "url": "https://urgent.news/2026/09/24/europes-payment-sovereignty-problem-is-not-what-we-think",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-24T10:52:45.000Z",
  "source": {
    "name": "Euronews",
    "slug": "euronews",
    "url": "https://www.euronews.com/2026/09/24/europes-payment-sovereignty-problem-is-not-what-we-think"
  },
  "original_language": "en",
  "account": "Europe is grappling with the idea of payment sovereignty, but the focus has been misplaced. The concern that Europe is overly dependent on two American card schemes has become the dominant narrative, overshadowing the true source of vulnerability. The real risk lies not in the plastic cards themselves, but in the currency backing them.\n\nEuropean banks heavily rely on dollar-denominated markets for various financial activities, including trade finance, energy markets, capital markets, correspondent banking, and clearing. While the euro accounts for nearly 20% of international currency usage, a significant portion of large cross-border transactions still pass through the dollar system. This exposure subjects European institutions to US sanctions, anti-money laundering rules, and extraterritorial legislation, irrespective of European political stances.\n\nEuropean banks and companies are often compelled to comply with US sanctions, even when European governments disagree with their scope. The choice is stark: adhere to US sanctions or risk losing access to dollar clearing and global markets. Card schemes are merely the periphery of this system; they are not its core. Even if the international payment schemes were owned by Europe, European institutions would still have to adhere to US sanctions due to the underlying currency exposure.\n\nThe fear of the United States cutting off American payment networks in Europe is largely unfounded. There is no historical precedent for such a move, and doing so would harm US commercial interests, disrupt global trade, and undermine trust in American infrastructure. If tensions escalated to the point where this risk became real, the transatlantic relationship would have deteriorated to the point where payments would be the least of Europe's worries.\n\nHowever, this does not invalidate the card debate entirely. Card payments are just one component of a diverse European electronic payments system, which also includes credit transfers, direct debits, instant payments, cash, and emerging account-to-account solutions, as well as digital currency options. When considering all electronic payments, card schemes constitute only a third of all non-cash transactions at the EU level, and even less in large markets like France and Germany.\n\nIn France, Cartes Bancaires handles around four-fifths of card transactions, often in conjunction with international networks for cross-border acceptance. In Germany, girocard plays a similarly dominant role domestically, complemented by account-to-account and instant payments. While many Member States lack domestic schemes and rely on non-European providers, a majority of domestic transactions in Europe currently run through international schemes. Ironically, these non-EU schemes remain the only truly pan-European providers.\n\nThe concerns surrounding payment sovereignty are not unfounded, but they must be directed at the right target. Payments are indeed critical infrastructure, driving growth, underpinning daily life, and providing resilience during crises. Recent history demonstrates this, with instances such as the disconnection of Russian banks from international payment systems, sanctions imposed through financial institutions, and extraterritorial targeting of European officials.\n\nUltimately, pursuing payments 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 are promising but not yet fully operational, and they cannot eliminate the need for international schemes to handle payments outside the euro area. A sustainable path forward involves creating a multilayered ecosystem where national, European, and international payment solutions coexist without fragmentation.\n\nReal sovereignty means strengthening the euro. The digitization of finance offers three promising avenues: enhancing the role of the euro in international transactions, promoting competition and innovation in the payment market, and fostering a more decentralized financial system that reduces reliance on extraterritorial entities.",
  "summary": "Europe's payment sovereignty problem is not what we think, writes Joachim Wuermeling, a former regulator at the European Central Bank (ECB). The real exposure is not the card in your pocket, but the currency behind it. Europe must strengthen the euro’s international role.",
  "key_points": [
    "Europe's payment sovereignty concern misdirected; focus on dollar exposure, not cards",
    "US sanctions force European institutions to comply despite political disagreements"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}