Opportunity for European Payment Independence
Europe is making significant strides in establishing independent and trusted payment infrastructures, aiming to enhance resilience and sovereignty in digital payments while complementing traditional cash systems.
One of the latest initiatives is the launch of Wero, a pan-European digital wallet introduced in 2024 as part of the European Payments Initiative. Backed by 14 major European banks including Deutsche Bank, Wero enables instant person-to-person payments using a phone number and debit directly from bank accounts. The service is already live in Belgium, France, and Germany.
The European Central Bank (ECB) is also actively progressing on the development of the digital euro. As of mid-2025, the ECB has approved providers for the internal components of the digital euro platform and published multiple progress reports. The digital euro is designed to complement cash, offering a "digital expression of cash" to extend its benefits into electronic payments while preserving legal tender status.
However, challenges associated with the digital euro include ensuring seamless integration with existing systems, maintaining privacy and security, and balancing inclusivity with financial stability considerations. Another key challenge is preserving the resilience and availability of cash, especially during crises where digital infrastructure might fail.
The potential benefits of the digital euro are broad. It could enhance Europe's autonomy in payments by reducing dependence on US-based payment networks. Access to a wider range of payment methods, increased payment safety, security, efficiency, and privacy, greater financial inclusion, and reduced costs for merchants are also potential advantages.
The debate on Europe's payment sovereignty is not limited to experts. A podcast emphasised that this is a strategic issue for all of Europe. The discussion at the Payment Exchange 2025 highlighted the need for more speed, more courage, and more European cooperation in the payment sector.
Some critics argue that the pace of innovation in the German credit industry is too slow, while others point to initiatives like Wero as evidence of progress. The digital euro is another contentious issue, with opinions divided on its usefulness and added value. However, it is clear that innovation is seen as necessary to make Europe more independent in the payment sector.
Notable figures in the discussion include Lars-Thorben Niggehoff, a freelance journalist and founder of the journalist bureau dreimaldrei, who writes about financial topics, SMEs, and the real estate market for various publications. Oliver Hommel, CEO of EURO Kartensysteme, and Marcus Mosen, Chairman of the Supervisory Board at N26, expressed concerns about Europe's dependence on US payment systems like Visa, Mastercard, and PayPal. Hommel cited the US's use of payment power politically against Venezuela as a warning of potential risks.
The question remains whether these assets are sufficient to create a genuine European payment alternative or if Europe will continue to be influenced by global interests. The digital euro must be user-friendly to be effective. The need for more pragmatism without downplaying the risks is clear in the discussion.
- The growth of the digital euro and initiatives like Wero show that Europe is leveraging technology in its finance and business sectors to create independent digital payment infrastructures, of which user-friendliness plays a significant role in ensuring its effectiveness.
- As Europe strives to bolster its sovereignty in digital payments, it's evident that the strategic discussion encompasses a broad range of aspects, encompassing business, finance, and technology, with the digital euro being a critical component of this evolution.
