There's a reason every decentralized system eventually finds its way onto a platform: platforms solve real-world problems that platform users struggle to solve for themselves.
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Two days after Lagarde's radio announcement, 13 European countries announced the formation of "EuroPA," an alliance that will facilitate regionwide transactions that bypass American payment processors (as well as Chinese processors like Alipay):
As *European Business Magazine* points out, EuroPA is the latest in a succession of attempts to build a European payments network:
Europe's $24 Trillion Breakup With Visa and Mastercard
A 130-million-user payment system backed by 16 major banks just launched to challenge Visa/mastercard
European Business Magazine (europeanbusinessmagazine.com)
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There's Wero, a 2024 launch from the 16-country European Payments Initiative, which currently boasts 47m users and 1,100 banks in Belgium, France and Germany, who've spent €7.5b through the network:
Europe’s Banks are launching new product to break the Visa/Mastercard dominance
The largest banks in the European Union have been quietly developing a new payment system that aims to give customers the option to abandon their Visa (NYSE:V) and Mastercard (NYSE:MA) cards, Bloombers News reported on Friday. Known as Wero, this initiative is currently being rolled out across much of Western Europe, supported by 16 major banks and payment processors, including BNP Paribas (OTC:BNPQY) SA, Deutsche Bank AG (NYSE:DB), and Worldline SA, the report added. While this may seem straightforward, successfully implementing Wero could result in losses for Visa and Mastercard, potentially costing them billions in fees from European merchants every time a consumer uses their cards.
Yahoo Finance (finance.yahoo.com)
Wero launched as a peer-to-peer payment system that used phone numbers as identifiers, but it expanded into retail at the end of last year, with several large retailers (such as Lidl) signing on to accept Wero payments.
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There's Wero, a 2024 launch from the 16-country European Payments Initiative, which currently boasts 47m users and 1,100 banks in Belgium, France and Germany, who've spent €7.5b through the network:
Europe’s Banks are launching new product to break the Visa/Mastercard dominance
The largest banks in the European Union have been quietly developing a new payment system that aims to give customers the option to abandon their Visa (NYSE:V) and Mastercard (NYSE:MA) cards, Bloombers News reported on Friday. Known as Wero, this initiative is currently being rolled out across much of Western Europe, supported by 16 major banks and payment processors, including BNP Paribas (OTC:BNPQY) SA, Deutsche Bank AG (NYSE:DB), and Worldline SA, the report added. While this may seem straightforward, successfully implementing Wero could result in losses for Visa and Mastercard, potentially costing them billions in fees from European merchants every time a consumer uses their cards.
Yahoo Finance (finance.yahoo.com)
Wero launched as a peer-to-peer payment system that used phone numbers as identifiers, but it expanded into retail at the end of last year, with several large retailers (such as Lidl) signing on to accept Wero payments.
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Last week, Wero announced an alliance with EuroPA, making another 130m people eligible to use the service, which now covers 72% of the EU and Norway. They're rolling out international peer-to-peer payments in 2026, and retail/ecommerce payments in 2027.
These successes are all the more notable for the failures they follow, like Monnet (born 2008, died 2012).
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Last week, Wero announced an alliance with EuroPA, making another 130m people eligible to use the service, which now covers 72% of the EU and Norway. They're rolling out international peer-to-peer payments in 2026, and retail/ecommerce payments in 2027.
These successes are all the more notable for the failures they follow, like Monnet (born 2008, died 2012).
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Even EPI has limped along since its founding, only finding new vigor on the heels of Trump threatening EU member states with force if he wasn't given Greenland.
As *EBM* writes, earlier efforts to build a regional payment processor foundered due to infighting among national payment processors within the EU, who jealously guarded their turf and compulsively ratfucked one another. This left Visa/Mastercard as the best (and often sole) means of conducting cross-border commerce.
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Even EPI has limped along since its founding, only finding new vigor on the heels of Trump threatening EU member states with force if he wasn't given Greenland.
As *EBM* writes, earlier efforts to build a regional payment processor foundered due to infighting among national payment processors within the EU, who jealously guarded their turf and compulsively ratfucked one another. This left Visa/Mastercard as the best (and often sole) means of conducting cross-border commerce.
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This produced a "network effect" for Visa/Mastercard: since so many Europeans had an American credit card in their wallets, EU merchants had to support them; and since so many EU merchants supported Visa/Mastercard, Europeans had to carry them in their wallets.
Network effects are pernicious, but not insurmountable. The EU attacks this problem from multiple angles - not just EuroPA, but also through the creation of the Digital Euro, a Central Bank Digital Currency (CBDC).
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This produced a "network effect" for Visa/Mastercard: since so many Europeans had an American credit card in their wallets, EU merchants had to support them; and since so many EU merchants supported Visa/Mastercard, Europeans had to carry them in their wallets.
Network effects are pernicious, but not insurmountable. The EU attacks this problem from multiple angles - not just EuroPA, but also through the creation of the Digital Euro, a Central Bank Digital Currency (CBDC).
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Essentially, this would give any European who signs up an account with the ECB, the federal bank of the Eurozone. Then, using an app or a website, any two Digital Euro customers could transfer funds to one another using the bank's own ledgers, instantaneously and at zero cost.
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Essentially, this would give any European who signs up an account with the ECB, the federal bank of the Eurozone. Then, using an app or a website, any two Digital Euro customers could transfer funds to one another using the bank's own ledgers, instantaneously and at zero cost.
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*EBM* points out a critical difficulty in getting EuroPA going: because it is designed to be cheap to use, it doesn't offer banks the windfall profits that Visa/Mastercard enjoy, which might hold back investment in EuroPA infrastructure.
But banks are used to making small amounts of money from a *lot* of people, and with the Digital Euro offering a "public option," the private sector EuroPA system will have a competitor that pushes it to continuously improve its systems.
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*EBM* points out a critical difficulty in getting EuroPA going: because it is designed to be cheap to use, it doesn't offer banks the windfall profits that Visa/Mastercard enjoy, which might hold back investment in EuroPA infrastructure.
But banks are used to making small amounts of money from a *lot* of people, and with the Digital Euro offering a "public option," the private sector EuroPA system will have a competitor that pushes it to continuously improve its systems.
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It's true that European payment processing has been slow and halting until now, but that was when European businesses, governments and households could still pretend that the dollar - and the payment processing companies that come along with it - was a neutral platform, and not a geopolitical adversary.
If there's one thing the EU's demonstrated over the past three years, it's that geopolitical threats from massive, heavily armed mad empires can break longstanding deadlocks.
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It's true that European payment processing has been slow and halting until now, but that was when European businesses, governments and households could still pretend that the dollar - and the payment processing companies that come along with it - was a neutral platform, and not a geopolitical adversary.
If there's one thing the EU's demonstrated over the past three years, it's that geopolitical threats from massive, heavily armed mad empires can break longstanding deadlocks.
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Remember: Putin's invasion of Ukraine and the end of Russian gas moved the EU's climate goals in ways that beggar belief: the region went from 15 years behind on its solar rollout to ten years *ahead* of schedule in just a handful of months:
This despite an all-out blitz from the fossil fuel lobby, one of the most powerful bodies in the history of civilization.
Crises precipitate change, and Trump precipitates crises.
eof/
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@pluralistic I love that you write your essay out first then chop it up for Mastodon.
I write a thread on mastodon then edit it for my blog. I'm not sure that's the most efficient way to do it.
@fromjason Thank you!
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But there's another reason to get shut of Visa/Mastercard: Trump controls them. He can order them to cut off payment processing for any individual or institution that displeases him. He's already done this to punish the International Criminal Court for issuing a genocide arrest warrant for Benjamin Netanyahu, and against a Brazilian judge for finding against the criminal dictator Jair Bolsonaro (Trump also threatened to have the judge in Bolsonaro's case assassinated).
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@pluralistic Visa and MasterCard already cut off payment processing for merchants engaged in industries which enrage the typical puritan American culture.
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There's a reason every decentralized system eventually finds its way onto a platform: platforms solve real-world problems that platform users struggle to solve for themselves.
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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
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@pluralistic The PIX exercise in Brazil is very relevant to this article
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R relay@relay.infosec.exchange shared this topic
