ECB’s digital euro development targets Visa and Mastercard’s 47% market share

Visa and Mastercard already process nearly half of every euro spent on cards across the eurozone, a dominance that has pushed European officials to build a public alternative: a new European Central Bank digital currency known as the digital euro. “Payment systems are not neutral; they are instruments of power,” Gilles Boyer, a French member of the European Parliament, said in June, the same day the European Parliament’s economic affairs committee voted 43 to 14 to back the project. “We Europeans have had many wake-up calls about our dependence on the U.S. We are fully awake now.”

Key takeaways

• Visa and Mastercard processed 47% of the eurozone’s card payment value in 2025, according to GlobalData.
• A 12-month pilot of the digital euro is set to start in the second half of 2027, with 36 finance firms including Deutsche Bank, Revolut, Adyen and UniCredit taking part.
• Businesses across the euro area will be required to accept the digital euro, both in-store and online, by 2029.
• The European Central Bank estimates its own development costs at €1.3 billion, while banks could collectively face €4 billion to €6 billion in costs over four years to run the system.
• Total noncash payments in the euro area reached €233.8 trillion in 2025, underscoring the scale of the market the digital euro is entering.

The Digital Euro Initiative as a Strategic Move

What Exactly Is the Digital Euro?

Introduced by the European Central Bank, the digital euro is a new digital central bank currency intended to act as an electronic counterpart to the cash the bank already issues. Unlike private payment apps, it would offer people and businesses in the euro area a free, universally accepted way to pay, backed directly by the central bank rather than a commercial network.

That distinction matters. Physical cash is the one form of money the ECB still fully controls, and it is fading fast. According to the ECB, which has already discontinued €500 notes, the proportion of eurozone businesses no longer accepting cash has tripled to 12% over the last three years. As cash use shrinks, officials argue that a European Central Bank digital currency is the only way to keep a public, non-commercial option alive in daily payments.

Reducing Dependence on US Payment Systems

The push behind the digital euro is less about innovation than about leverage. Visa and Mastercard processed 47% of eurozone card payment value in 2025, GlobalData figures show, and the concentration is even starker in the U.K., where 95% of card transactions run through systems owned by the same two U.S. companies. Fifteen of the euro area’s 21 countries still have no domestic digital payment solution of their own, the ECB says, and no single European scheme works seamlessly across the whole bloc.

European policymakers worry about what would happen if access to either U.S. network were ever disrupted, a concern that has sharpened as the Trump administration has leaned more heavily on financial sanctions as a foreign-policy tool. “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 RS2, a payments technology firm involved in the pilot. “The ECB wants Europe to have its own foothold rather than depend entirely on foreign-built infrastructure.”

This is where the strategic logic becomes clear: a public digital euro would give the bloc a fallback that doesn’t rely on eurozone payment systems owned abroad. Pierre-Antoine Vacheron, CEO of French payment company Worldline, frames the ambition modestly. “A successful digital euro could boost the international role of the euro, helping Europe remain competitive as global payments systems become increasingly digital,” he says. “It’s not a revolutionary improvement, it’s a genuine gap-filler.”

Pilot Program and Adoption Timeline

The project is moving from policy debate into live testing, with a defined calendar that stretches into the next decade.

36 Finance Firms Join the Digital Euro Pilot

Set to begin in the second half of 2027, a 12-month pilot already has 36 finance firms — including Deutsche Bank, Revolut, Adyen and UniCredit — signed up to participate. Any eventual launch still depends on EU legislation and a later ECB decision to issue the currency.

Mandatory Acceptance by 2029

By 2029, businesses will be required to accept digital euros both in physical stores and online. This requirement grants the project two structural advantages seldom available to private rivals: mandatory acceptance by merchants and mandatory distribution through banks. Once the digital euro launches, retailers throughout the EU will be expected to accept it, while every bank will be required to provide it to its customers. Still, Vacheron cautions that compliance isn’t the same as success: “The real test will be whether it achieves broad everyday adoption.”

Economic and Operational Implications

Development and Bank Costs

Building and operating a parallel payment network across the euro area carries a substantial price tag. The ECB’s projected development costs for the digital euro scheme amount to €1.3 billion ($1.5 billion), with ongoing operating costs expected to run about €300 million ($350 million) per year. Banks face an even heavier load: the ECB estimates the digital euro could collectively cost them €4 billion to €6 billion ($4.7 billion to $7 billion) over four years, in addition to maintaining their current infrastructure. Some of that cost may be recovered by charging merchants a bank-set digital-euro transaction fee — a move critics say would simply recreate the interchange-fee model the project was meant to disrupt, leaving banks to foot a bill for infrastructure nobody ends up using.

Those figures sit against an enormous backdrop: total noncash payments in the euro area reached €233.8 trillion in 2025, a scale that explains both why Brussels sees the current dependence on Visa and Mastercard as risky and why the cost of building an alternative is so large.

For businesses, the calculation looks different. By allowing merchants to skip interchange fees altogether and settle transactions instantly, a digital euro—according to financial services regulatory lawyer Martin Dowdall of Winston Taylor—could help make Europe “a cheaper, more attractive place” to do business. This argument resonates particularly well since, in May 2025, trade groups representing Amazon, Carrefour, H&M, Ikea and other major retailers sent a letter to the European Commission pressing it to rein in what they described as excessive card-scheme fees charged by Visa and Mastercard, noting that such fees had climbed 33.9% between 2018 and 2022.

A standardized payment rail could also simplify Europe’s fragmented checkout landscape, where iDEAL in the Netherlands, Bizum in Spain and Blik in Poland each creates a different experience market by market. “Managing a wide mix of regional payment methods across different markets brings real complexity for businesses,” says Carlo Bravin, head of payments partnerships EMEA at Adyen, though he notes “it’s still too early to see strong merchant demand for the digital euro specifically.” Rebecca Christie, a senior fellow at Bruegel, expects limited immediate impact outside cash-heavy, slower-digitizing economies. “Merchants will want to know, and reduce where possible, the costs of processing the new system before they embrace it,” she says.

Challenges and Competition in Europe’s Payments Landscape

Even as legal mandates support it, the digital euro is entering a market already being shaped by rivals: BNP Paribas, Commerzbank and Rabobank have each thrown their weight behind Wero, a bank-funded digital wallet that already has 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. “That raises difficult questions about whether Europe is effectively developing two solutions to the same strategic problem.”

Christie doesn’t see the two efforts as being in conflict. “It’s important to have a clear public anchor,” she says. “No one wants a situation where the private sector develops something that assumes the role of a public service and then becomes unavailable.” The ECB echoes that framing: “It’s about enhancing people’s freedom of choice,” says Josephine Nachtsheim, the bank’s digital-euro spokesperson, adding that the project is meant to preserve access to central bank money and strengthen “the resilience and strategic autonomy of European payments.”

History offers a sobering check on expectations. Comparable digital-currency trials elsewhere have faced difficulties: the Eastern Caribbean’s DCash pilot was halted in 2024, while Nigeria’s eNaira, which launched in 2021, continues to run but has seen only modest uptake. Dowdall is more direct, calling similar overseas initiatives “complete and utter flops,” while Apostolos Thomadakis, a senior research fellow at the Centre for European Policy Studies, questions whether the public case for the project has even been clearly articulated. “It’s difficult to understand the need for a digital euro,” he says, arguing that official messaging leans too heavily on abstractions like “financial stability, strategic autonomy, or a monetary anchor” that mean little to ordinary people.

Integration adds its own friction. Businesses will need new tools for refunds, reconciliation and outage protection, and El Haj warns the system will demand constant upkeep: “Card networks already push updates twice a year, and the digital euro will likely demand the same ongoing adjustment.” Banks, meanwhile, face the added risk of customers shifting deposits into digital-euro wallets instead of interest-bearing accounts — a second cost layered on top of running a parallel payment system.

A timing issue also lies at the heart of its relevance to global competition, since the digital euro has needed six years to reach the pilot phase. During that period, Washington abandoned its own digital-dollar ambitions, opting instead to pass the GENIUS Act in support of private, dollar-backed stablecoins, which processed about $33 trillion worth of transactions in 2025. “As a direct challenger to U.S. payment dominance, the digital euro is undoubtedly arriving late,” Rider says. “It will launch into a market where consumer payment habits are already deeply established and private European alternatives are scaling.” He adds a sharper warning about what comes next: “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.” In that light, the digital euro risks arriving just in time to fight the last war over Europe’s payment infrastructure, even as a new one — fought in stablecoins rather than card networks — is already underway.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.