You may or may not be aware of the fact that every time (with certain, specific exceptions) someone in Europe pays with a card or their phone, the payment is processed by foreign companies like Visa, Mastercard, PayPal, or Alipay.
Even though the customer and the shop are in Europe, the system running the payment usually isn’t European. The first three are U.S. companies, while Alipay is Chinese.
Christine Lagarde, who leads the European Central Bank, believes that Europe urgently needs its own payment system so it isn’t dependent on the United States or China, in light of increasing tensions.
It’s time to stop, because these contexts create security and control risks. Moreover, Visa and Mastercard willingly stopped operating in Russia after the invasion, and might stop operation in Europe is relations continue to grow colder and colder — a hypothesis which might have seemed improbable up until the recent skirmish over Greenland.
Now, a group of major European banks have created a new digital payment system called Wero.
Launched by the European Payments Initiative, Wero allows people to send money through their phone number, not needing a card network like Visa or Mastercard. It runs on Europe’s own banking infrastructure instead.
So far, tens of millions of users in countries like Belgium, France, and Germany have signed up, and billions of euros have already been transferred through the system.
More countries are joining, and European payment apps are starting to connect with each other so people can send money across borders without using American networks.
Europe has tried to build its own payment system before, but past efforts failed, with each country building its own separate solution.
Now, however, Europe is linking existing national systems together to create something big enough to compete.
At the same time and separately from Wero, the European Central Bank is also working on a “digital euro,” to be issued by the central bank.
