Europe Bets €1.3 Billion on a Digital Euro to Break Visa-Mastercard Grip

Visa and Mastercard processed 47% of the eurozone's card payments value in 2025, and the European Central Bank wants to change that with a digital euro costing an estimated €1.3 billion ($1.5 billion) to build. A 12-month pilot starts in the second half of 2027, with 36 finance firms — including Deutsche Bank, Revolut, Adyen and UniCredit — signed up. Businesses across the EU must accept the currency in-store and online by 2029.

The stakes are geopolitical as much as technical. In the U.K., the concentration is higher still: 95% of card transactions run on systems owned by the two U.S. companies, according to GlobalData. Fifteen of the euro area's 21 countries lack a domestic digital payment solution, the ECB says, and no European payment scheme works seamlessly across the bloc.

"Payment systems are not neutral; they are instruments of power," Gilles Boyer, a French member of the European Parliament, said in June. "We Europeans have had many wake-up calls about our dependence on the U.S. We are fully awake now." That same day, the European Parliament's economic affairs committee voted 43 to 14 to back the digital euro.

Why is the ECB moving now?

Under President Donald Trump, Washington has leaned harder on financial sanctions as a foreign-policy tool, raising European fears of disruption if access to U.S. networks were cut off. Physical cash — the one money form the ECB fully controls — is fading: the share of eurozone companies not accepting cash has tripled to 12% over three years, and the bank has stopped issuing €500 notes.

"It won't be easy to replace any of the existing payment methods overnight if one of the big networks decides to shut down in Europe," says Radi El Haj, chief executive of payments technology firm RS2, a pilot participant. "The ECB wants Europe to have its own foothold rather than depend entirely on foreign-built infrastructure."

What does it change for business?

A digital euro would let merchants bypass interchange fees entirely and settle instantly. In May 2025, trade groups representing Amazon, Carrefour, H&M and Ikea urged the European Commission to curb Visa and Mastercard card-scheme fees, citing research showing a 33.9% increase between 2018 and 2022. That combination, says regulatory lawyer Martin Dowdall of Winston Taylor, could make Europe "a cheaper, more attractive place" to do business.

The currency also carries two structural advantages: mandatory merchant acceptance and mandatory distribution through banks from 2029. Yet adoption is uncertain. "It's not a revolutionary improvement, it's a genuine gap-filler," says Pierre-Antoine Vacheron, CEO of French payments company Worldline. "The real test will be whether it achieves broad everyday adoption."

What are the costs and risks?

The numbers are substantial:

• €4 billion to €6 billion ($4.7–$7 billion): estimated collective cost to European banks over four years
• €1.3 billion ($1.5 billion): ECB setup costs
• Roughly €300 million ($350 million) a year: ongoing operating costs
• €233.8 trillion: total value of noncash payments in the euro area in 2025

Banks face deposit flight into digital-euro wallets and the cost of running a second payment system. Critics warn that if banks charge merchants their own digital-euro fees, they would effectively re-create the interchange model the project was meant to disrupt.

The track record elsewhere is poor. The Eastern Caribbean's DCash pilot was suspended in 2024, and Nigeria's eNaira, launched in 2021, has seen limited adoption. "It's difficult to understand the need for a digital euro," says Apostolos Thomadakis, senior research fellow at the Centre for European Policy Studies. "Officials talk about financial stability, strategic autonomy, or a monetary anchor — abstractions that mean little to ordinary people."

Is it too late?

Competition is coming from inside Europe, too. BNP Paribas, Commerzbank and Rabobank back Wero, a bank-funded digital wallet with 50 million users. "By the time a digital euro is issued, Wero could already be established as a significant European omnichannel payment scheme," says Jacob Rider, senior program director at Projective Group.

Meanwhile, Washington rejected its own digital dollar and passed the GENIUS Act to support private, dollar-backed stablecoins — which handled roughly $33 trillion in transactions in 2025. "Today, European dependence on U.S. card networks is a central concern, but by 2029, the main issue will be the influence of dollar-denominated private digital money," Rider says.

The ECB insists the digital euro complements existing options rather than replacing them. "It's about enhancing people's freedom of choice," says Josephine Nachtsheim, the ECB's digital-euro spokesperson. Six years after the project began, it will launch into a market where consumer habits are set, private alternatives are scaling, and dollar stablecoins keep growing. The digital euro may be solving yesterday's problem.