Since the start of this year, European officials and business folks have been pushing hard for their own alternatives to American payment systems like Visa and Mastercard. This topic is getting some serious traction due to the cooling relations between the US and the EU. To cut down on dependency, the EU is gearing up to launch its own version of international payment systems based on the digital euro. Details of this initiative were shared with Oninvest by a representative of the ECB and an aide to a Member of the European Parliament.
Urgent matter
Europe 'urgently' needs alternatives to American payment systems Visa and Mastercard, said the head of the European Payments Initiative, Martina Weimert, in a recent interview with the Financial Times. She noted that 'independence is a matter of time, and we need action now,' emphasizing that two American companies process about two-thirds of card transactions in the eurozone, while 13 EU countries do not have their own payment systems.
In April, the French payment network CB joined these calls, writes FT. It quotes the head of the company, Philippe Laulani: 'The current tension in relations with the US under Donald Trump highlighted the idea that some services could be turned off or provided under certain conditions.'
How does the EU envision its own payment ecosystem?
At the center of this system will be the digital euro, and among its participants will be the ECB and the national central banks of the eurozone countries, collectively known as the Eurosystem. This is not a separate legal entity but a system of business relations and technical solutions.
Currently, the ECB has exclusive rights to authorize the issuance of euros, while national central banks physically issue and withdraw banknotes. The ECB will also decide on the issuance of the digital euro, and all participants in the Eurosystem will be its issuers.
The system will initiate the conversion of funds in a commercial bank account into digital euros in real time — exactly at the moment of payment. The ECB essentially 'issues' the necessary digital amount to cover the transaction without requiring the user to manually top up their digital euro wallet in advance. An ECB representative — in an exclusive comment to Oninvest
Unlike funds in commercial bank accounts, which are essentially the liabilities of that bank, the digital euro is a liability not only of commercial banks but also of the central bank to the holders of the money.
For the digital euro, as indicated by regulatory materials, a platform called Digital Euro Service Platform (DESP) will be created, through which banks and payment providers will conduct operations, manage wallets, and interact with each other. The Eurosystem will act as the customer and controller of the platform architecture.
DESP is built on top of TARGET — an existing European express transfer system. Currently, only banks use it — for them, it serves as a mechanism for real-time settlements via debiting and crediting funds to their accounts at the central bank. With the digital euro, the Eurosystem will conduct settlements essentially using central bank money, but in the retail segment.
It is planned that for the user, payments will occur as they do now: payments can be made via card or smartphone, as well as through an electronic wallet.
To make payments with the European equivalent of Visa or Mastercard, a person will first need to open an account in digital euros with their bank or payment provider. During payment, the system will check the balance in digital euros and, if necessary, automatically 'top up' the missing amount from a regular bank account using a 'reverse waterfall' mechanism, explains an ECB representative: essentially, this is an automatic transfer from a commercial bank account to digital euros at the moment of payment.
Among payment instruments will be special cards with a built-in power source — either a battery or accumulator. This will allow payments to be made even without an internet signal, as Oninvest found out by examining the rulebook for the ecosystem. Regular cards draw power from the terminal's field: as long as there is contact with the POS and communication with the backend, payment goes through.
There will also be the possibility to 'pre-load' digital euros into an offline wallet on a phone or separate card for payments without internet — essentially, this will work like a prepaid card.
A tangled web of interests and bureaucracy
The European Commission presented the project for launching the digital euro almost three years ago, on June 28, 2023, but it has not yet been put into action. Until recently, there was a lack of political will in the EU to adopt it, says an Oninvest assistant to the MEP from Germany on the condition of anonymity. Against the backdrop of elections to the European Parliament, changes in committee compositions, and ongoing negotiations on sensitive issues, there was essentially no one to promote the bill, explains the Oninvest interlocutor. Now, with the leadership and composition of responsible committees — on economic and monetary affairs, the internal market, and civil liberties — having changed, there are more chances for the bill to be agreed upon, he speculates.
There has been no response from these committees to email inquiries sent by Oninvest.
If the bill can be agreed upon and passed in 2026, the pilot for the digital euro could be launched as early as 2027, with full operations expected by 2029, said an ECB representative.
Another issue is that American tech giants and US banks operating in Europe are very reluctant to give up their technologies and lose their share of the payment market, continues the assistant to the MEP.
For Europe, this means a 'structural vulnerability': the EU does not control the rules of the game or the risks of disconnecting entire segments of the economy during a crisis. Additionally, as previously reported by Oninvest, EU officials are concerned about the passage of a stablecoin law in the US tied to the dollar, as this could pose a threat to the spread of the 'digital dollar' in Europe.
The project also affects the interests of Apple and Google. Contactless payments on smartphones operate on two key technologies: NFC (Near Field Communication) and Secure Element. NFC is a short-range wireless communication technology and hardware module that allows devices to exchange data when you tap your phone against a payment terminal. Secure Element is a specially protected chip or, in certain devices, a memory area where keys are stored and operations are performed, without which secure payments are impossible.
Two American corporations control access to both technologies. Until recently, third-party payment services could develop their own applications but were unable to use NFC and Secure Element without participating in the Apple Pay or Google Pay process.
The situation was changed by the EU Digital Markets Act (DMA). It essentially imposes special obligations on Apple and Google to allow third-party providers access to key device functions, including NFC and Secure Element 'on equal terms with their own services' and not to require the use of only their payment service. The law stipulates that tech giants will have to pay if they refuse to grant direct access to their platforms. This is a key element in reducing the technological dependency of European payments on Big Tech, said an ECB representative.
How can investors invest in the digital euro?
By the end of 2025, the ECB already conducted a tender selection of key suppliers for the components of the digital euro platform. According to the regulator, more than 50 companies responded to the applications, and framework agreements were signed with 10 companies.
They were selected to solve five specific task blocks: finding connections for transfers via phone number, anti-fraud and risk management, developing an official app, secure exchange of payment information, and a hardware offline solution.
All companies are European, and some of them are public. For instance, Sapient GmbH and Tremend Software Consulting, responsible for finding aliases (transfers via phone number/email), are subsidiaries of Publicis Groupe. Capgemini Deutschland, acting as a backup contractor in the anti-fraud block, is part of Capgemini SE, one of the largest IT consultants in the world.
Thus, some players are worth watching for those interested in investing in the digital euro project. Currently, shares of French Publicis Groupe are trading around €78 per share, with quotes down 9.7% over the year. Capgemini shares are priced at around €102, having lost more than 22% of their value over the year.
The president of the German Bundesbank, a member of the ECB Governing Council, Joachim Nagel, has linked the digital euro project with investment opportunities.
I am convinced that there is enough space in the market for both private and public companies. Consumers appreciate the ability to choose between different options. The digital euro is initially designed to support new innovations and features in the future... Solutions from private companies may benefit from the pan-European reach of the digital euro, such as by integrating it into electronic wallets. Joachim Nagel
However, investors should understand that work on these agreements will begin only after the European Parliament passes the law on the digital euro, and after the ECB Governing Council gives the project a 'green light.'
Another limitation is the distribution of the euro. According to SWIFT, in international payments (excluding the eurozone), the share of the European currency in February 2026 was just over 14%. In comparison, the dollar exceeded 57%. ㅤ
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