Europe’s reliance on foreign-controlled payment systems has emerged as a material financial stability and sovereignty issue, exposing a weakness in the bloc’s broader independence strategy. Recent political warnings have drawn attention to how deeply everyday commerce depends on networks beyond European control.
The concern gained traction after comments from Aurore Lalucq, chair of the European parliament’s economic and monetary affairs committee, suggesting that US-controlled payment networks could be leveraged against Europe. Her argument rests on the fact that Visa and Mastercard underpin a large share of European retail transactions and ultimately fall under US jurisdiction. The precedent of Russia’s exclusion from these systems following its invasion of Ukraine illustrates how quickly access to funds and routine payments can be disrupted when geopolitical tensions escalate.
This vulnerability contrasts sharply with India’s approach. Over the past decade, India has developed the Unified Payments Interface, a state-backed digital payments infrastructure designed to minimise reliance on foreign networks. UPI functions as a public standard rather than a proprietary product, allowing banks, fintech firms and technology platforms to compete on top of shared infrastructure. Transactions settle instantly between bank accounts, fees are close to zero, and card networks play no structural role. As a result, digital payments have become widespread across income groups, while the share of credit cards in India’s digital transactions has declined significantly.
The European Union lacks a comparable public system. Existing initiatives, such as bank-led payment wallets, remain private sector solutions and do not address the underlying issue of control. Building a bloc-wide alternative would be institutionally complex and likely to face resistance from incumbent banks and established payment providers, particularly those already offering cross-border services. Nevertheless, the question being raised is not efficiency but autonomy.
The debate also carries regulatory and civil liberty implications. India’s model has prompted scrutiny over data governance, though Europe’s more developed privacy framework could mitigate similar risks. Meanwhile, other global powers are not standing still. China has built a domestically governed payments ecosystem and is actively exporting it through international partnerships. Against this backdrop, Europe’s payments debate highlights an unresolved tension between market-led solutions and strategic control, with implications that extend well beyond the checkout counter.
