On February 2, 2026, the European Payments Initiative (EPI) signed a Memorandum of Understanding with Alliance EuroPA. The alliance links Spain’s Bizum, Italy’s Bancomat, Portugal’s SIBS, and the Nordic Vipps MobilePay system. The agreement connects 130 million users across 13 countries through one interoperable payment network.
Headlines described the agreement as Europe’s breakup with Visa and Mastercard. The more interesting story behind the Wero payment system is infrastructure arbitrage. If it works, it could change the price of moving money across Europe.
Politicians sell the project as payment sovereignty, but that is not its main economic purpose. EPI is targeting a structural pricing gap that Visa and Mastercard have maintained for decades. EU regulation accidentally made those networks harder to dislodge.
I. Why Wero can undercut card fees
The EU adopted the Interchange Fee Regulation (IFR) in 2015. It capped consumer debit interchange at 0.2% and credit interchange at 0.3%. Interchange is the fee that the merchant’s acquiring bank pays to the cardholder’s issuing bank. Merchants initially celebrated the cap.
The next move was predictable to anyone who watches regulated industries. Visa and Mastercard shifted revenue to unregulated “scheme fees.” Card networks charge scheme fees for authorization, clearing, and settlement. Authorization approves a payment, clearing calculates obligations, and settlement transfers funds.
EuroCommerce reports that scheme fees rose by a cumulative 33.9% between 2018 and 2022. They increased by an average of 7.6% a year. European Commission data show an increase of €1.46 billion between 2016 and 2021.
The net merchant service charge is the merchant’s total card-acceptance cost. Ecommerce Europe found that the average charge almost doubled from 0.27% to 0.44% between 2018 and 2022. That increase effectively neutralized the regulatory benefit.
A Visa or Mastercard transaction can cost a European merchant up to 2% after all components. Wero uses Single Euro Payments Area (SEPA) Instant Credit Transfer infrastructure. SEPA Instant moves money directly between bank accounts with near-zero interchange and only processing fees.
In Germany, S-Payment has proposed a Wero merchant price of 0.77% plus gateway charges. A gateway connects a merchant’s checkout to the payment system. The difference is roughly 100 to 120 basis points per transaction. One basis point is 0.01 percentage points.
Because account-to-account (A2A) payments avoid the card-network layer, this cost difference creates the arbitrage opportunity. Visa and Mastercard process a combined $4.7 trillion of European volume. If merchants shifted that volume to Wero, the lower price could reduce annual card-network fees by tens of billions of euros.
Most analysis I read over the past few days asks whether Wero can beat Visa and Mastercard on user experience or brand recognition. I think that sets the wrong test. Wero needs to win on cost because A2A payments remove an entire layer of intermediation.
The open question is whether the cost advantage can overcome switching costs. It also depends on whether political leaders will force adoption where market forces alone might not.
II. What Wero is and why EuroPA changes it
Wero is EPI’s digital wallet on the SEPA Instant infrastructure. Users access it through their existing banking app. A phone number, email address, or QR code identifies the recipient. The payment moves between bank accounts in under 10 seconds and bypasses the card network.
EPI launched Wero for peer-to-peer (P2P) transfers in Germany on July 2, 2024. France followed in September and Belgium in November of that year. German e-commerce payments went live in November 2025. Lidl, Decathlon, and Rossmann were among the accepting merchants. EPI’s February 2026 roadmap scheduled point-of-sale (POS) payments using near-field communication (NFC) for 2026 to 2027.
EPI has 16 founding bank shareholders. The French shareholders include BNP Paribas, Crédit Agricole, and Société Générale. Deutsche Bank and Sparkassen-Finanzgruppe represent Germany. Sparkassen alone committed €150 million. ABN AMRO, ING, and Rabobank are Dutch shareholders.
The pan-European merchant acquirers Nexi and Worldline are also shareholders. An acquirer connects merchants to payment networks and receives their transactions. By February 2026, committed capital was roughly €500 million, and membership had grown to over 1,100 institutions. Revolut and N26 joined in 2025.
Before EuroPA, Wero had roughly 47 million users across France, Germany, and Benelux. Its footprint excluded most of southern and northern Europe. At that scale, it was not a challenger to Visa and Mastercard.
EuroPA connects Wero with Bizum’s 30.6 million Spanish users. It also adds Italy’s dominant Bancomat network, Portugal’s SIBS, and Vipps MobilePay’s 12.5 million Nordic users. The alliance uses a hub instead of requiring banks in each country to become EPI shareholders.
That architecture matters because the shareholder model already failed once. In 2021 and 2022, roughly 20 banks withdrew from EPI. All Spanish institutions left. The banks disagreed about governance and cost sharing.
The hub lets national systems retain their brands and governance while adding cross-border interoperability. A Bizum user in Madrid will be able to pay a German merchant. An Italian Bancomat customer can transfer money to someone in France. Moving from 47 million to 130 million users could give Wero enough reach to make support worthwhile for merchants.
EPI also acquired two established national payment systems. The Dutch system iDEAL processes 1.5 billion transactions a year and handles 72% of Dutch e-commerce. Payconiq/Bancontact dominates Belgium and Luxembourg. EPI completed both acquisitions in October 2023.
iDEAL will adopt Wero branding by the end of 2027. In France, Wero directly replaced the existing Paylib service and its 35 million users. EPI is therefore moving established transaction volumes onto one pan-European rail rather than acquiring users from scratch.
III. The geopolitical accelerant
The economics might not have created enough political support on their own. Russia changed the calculation. Visa and Mastercard suspended Russian operations in March 2022 after the invasion of Ukraine. Together, they controlled approximately 72% of Russian card payments.
Moscow was the intended target. Brussels drew an unintended lesson: American companies control payment networks that governments can weaponize. The US government could theoretically use the same tool against Europe. I discussed the broader logic in Bretton Woods III.
European Central Bank (ECB) President Christine Lagarde has become the initiative’s most vocal political champion. In early February 2026, she described how European payments usually flow. Whether consumers use a card or phone, Visa, Mastercard, PayPal, or Alipay typically handles the payment. Visa, Mastercard, and PayPal are US companies; Alipay is Chinese.
ECB Executive Board member Piero Cipollone has been more direct. He argues that reliance on non-European payment systems leaves Europe exposed to decisions made elsewhere. In March 2025, ECB Chief Economist Philip Lane said that this dependence leaves Europe “open to coercion.”
Trump’s second term has sharpened these concerns. EPI chief executive Martina Weimert told the Financial Times that the digital euro will take several years. It might arrive after Trump’s term ends. In her view, Europe is therefore somewhat short on time.
Tariff threats and territorial claims over Greenland added urgency. So did a pro-crypto US policy that opposes central bank digital currencies (CBDCs). Payment sovereignty began to resemble a defense priority rather than a technocratic goal. Defense spending currently commands political support across virtually all EU member states.
Wero’s predecessors lacked this urgency. The Monnet Project collapsed in 2012 after the European Commission refused to support multilateral interchange fees. Participating banks would have shared those fees under a common schedule. EPI abandoned its original card-scheme plan after the bank withdrawals. The Nordic P27 initiative collapsed in 2023.
Those projects failed while the geopolitical risk still felt abstract. By January 2026, the risk felt concrete. That month, 70 economists, including Thomas Piketty, published an open letter. They called the digital euro “the only defence” against dependence on US payment systems. That position lay outside the political mainstream only two years earlier.
IV. Profitability
The IFR was designed to protect merchants from Visa and Mastercard. I think it has inadvertently created one of the largest barriers to a new European payment network.
The 0.2% debit-interchange cap leaves little revenue for funding a new network. Visa and Mastercard spread their costs across a $24 trillion global transaction base. A European entrant must build comparable infrastructure and persuade hundreds of thousands of merchants to integrate. It must also acquire tens of millions of users under margins that regulation deliberately compressed.
Weimert estimates that a viable full-scale alternative requires “several billion euros.” Private estimates cited by Fortune reach €6 billion.
This is what often happens with bad regulation. A rule meant to weaken the duopoly made entry less attractive and strengthened its moat. Visa and Mastercard raised unregulated fees, so their total revenue per transaction barely changed. A new entrant cannot copy those scheme fees without losing its cost advantage. It must find revenue elsewhere.
EPI plans to earn revenue from value-added services. Its roadmap includes buy-now-pay-later (BNPL), digital identity, subscription management, and loyalty programs. Wero did not offer these services in February 2026; EPI scheduled them for 2027 and later.
Until then, bank shareholders subsidize Wero as a cost center. Sparkassen committed €150 million in patient, long-term capital and has a 200-year institutional horizon. BNP Paribas and Crédit Agricole can treat the costs as a strategic investment. Whether Wero ever becomes self-sustaining remains genuinely open.
V. What India and Brazil can teach Europe
Most Wero coverage cites India’s Unified Payments Interface (UPI) and Brazil’s Pix as proof of concept. Both systems operate at a much larger scale than Wero. UPI processed 228.3 billion transactions worth approximately $3.6 trillion in 2025. Transaction count grew 29% year over year. In June 2025, the International Monetary Fund (IMF) recognized UPI as the world’s largest retail fast-payment system.
Pix reached 175 million users in 2024. It processed 63.4 billion transactions worth $4.6 trillion that year, with 53% year-over-year growth. Both systems achieved within a few years what Visa and Mastercard built over decades.
The conditions behind UPI and Pix do not map cleanly onto Europe. India had a large unbanked population and low card penetration, so UPI filled a vacuum instead of displacing an established incumbent.
Brazil’s central bank required every financial institution to participate in Pix. Transfers were free for individuals. India and Brazil also had one regulatory jurisdiction each and populations accustomed to mobile-first payments.
Europe lacks those conditions. It has high card penetration and established consumer habits. The regulatory patchwork covers 27 member states plus associated countries. Each market has its own banking traditions and payment preferences. No single authority can require participation as Brazil’s central bank did.
Europe does have a useful advantage: SEPA already connects every bank account in the eurozone. Payment rails carry transaction instructions and funds. Wero does not need new rails. It needs a user interface and a merchant-acceptance layer on infrastructure that already processes trillions of euros each year.
The SEPA Instant Credit Transfer regulation became mandatory in 2025. Every eurozone bank must now support real-time payments. European governments have paid for the highway; Wero is building the on-ramps.
EU regulation gives Wero another advantage. In July 2024, the EU forced Apple to open iPhone NFC access to third-party wallets. Wero can therefore offer tap-to-pay on iPhones without using Apple Pay.
When this article was published in February 2026, the third Payment Services Directive (PSD3) was expected that year. It was likely to strengthen open-banking requirements further. The European Commission was investigating Visa and Mastercard’s fee structures.
In June 2025, the UK Competition Appeal Tribunal ruled unanimously against the networks. It found that their interchange-fee structures breach competition law. Europe is building an alternative while making the incumbent business model harder to sustain.
VI. Wero vs. Visa and Mastercard
Neither company had said much publicly about Wero by February 2026, and I read that silence as strategy. A response would raise the challenger’s profile. When pressed, the networks emphasized their value. On an October 2025 earnings call, Mastercard chief executive Michael Miebach argued that consumers and businesses choose cards in competitive markets because cards offer protection.
Both companies are nevertheless shifting toward multiple payment rails. Visa acquired European open-banking company Tink for approximately $2.2 billion in 2022. Open banking lets authorized providers connect to bank accounts through standard interfaces. The deal gave Visa access to the same A2A capability that Wero uses.
Mastercard acquired cybersecurity company Recorded Future for $2.65 billion in September 2024. The acquisition expanded Mastercard’s value-added services. Both companies now position themselves as payment-technology platforms rather than only card networks.
The strategy is rational. If A2A payments gain European share, Visa and Mastercard want to process those payments too. They already have merchant relationships, fraud-detection systems, and a global acceptance network. Wero could move transactions away from card rails only to find the same toll collectors on the new road.
The digital euro
The ECB is developing the digital euro in parallel. It is a central bank digital currency (CBDC) that would be legal tender across the eurozone. The EU Council agreed its negotiating position in December 2025. When this article was published in February 2026, a Parliament vote was expected in the first half of 2026. The first issuance was considered possible around 2029.
In October 2025, the ECB completed its preparation phase. It declared the digital euro technically ready.
EPI describes the two systems as complementary. Wero would transfer commercial-bank deposits, while the digital euro would transfer central-bank money. Their ambitions still overlap and create a coordination problem.
Banks worry about deposit outflows and implementation costs estimated at €4 billion to €5.8 billion. At publication, the legislation had no guaranteed parliamentary majority. Trump signed the GENIUS Act for stablecoins while banning federal CBDCs. Stablecoins are digital tokens designed to maintain a fixed value. Europe may therefore pursue a digital euro partly in response to a US policy that rejects the concept.
My read is that the digital euro and Wero are competing bets on one thesis: Europe needs sovereign payment infrastructure. The digital euro is the maximalist version; Wero is the pragmatic one.
I would bet on Wero arriving first. It could capture enough volume to make the digital euro’s added value harder to justify politically. Both projects could still fail, leaving Europe where it started: the outcome Visa and Mastercard are quietly optimizing for.
The rollout timetable
The February 2026 roadmap made the following 18 months decisive. It scheduled cross-border P2P payments for 2026 and Wero’s French and Belgian e-commerce expansion for that year’s second half. EuroPA targeted cross-border e-commerce and POS payments for 2027. iDEAL planned to complete its Wero migration by the end of 2027.
Consumer inertia was the largest identified risk in February 2026, not technology or regulation. Wero reported 47 million users, while Mastercard had over 900 million branded cards in EU circulation. Credit cards offered credit, rewards programs, and purchase protection that Wero could not match.
German adoption was notably sluggish at the time of publication. Wero launched first in Germany, but German users generated only 5% of its transaction volume. France dominated because Wero replaced Paylib there. Dutch merchants had opposed replacing iDEAL’s flat €0.29 fee with Wero’s percentage-based model.
I think the outcome depends on how European policymakers classify Wero. As a market initiative, its cost advantage may not overcome switching costs and consumer habits. As strategic infrastructure, governments could subsidize adoption as they subsidize defense procurement. Under that assumption, the math works.
EuroPA gives Wero something no earlier European payment project achieved: a network of 130 million users. That base could pressure merchants to support Wero because of its reach. Whether it is enough is a political question, not a technical one.
The headline’s $24 trillion figure is Visa and Mastercard’s combined global transaction volume. Europe accounts for roughly $4.7 trillion. Capturing 10% would move about $470 billion of annual payment volume away from card rails.
The infrastructure arbitrage is real. The gap between card-network fees and SEPA Instant costs is measurable and persistent. Execution remains the question, and in Europe it is always the question.