The End of Visa and Mastercard: A New Era for Payments in Europe

By Ion Jauregui – ActivTrades Analyst
The payments landscape in Europe could change dramatically if the project for a payments platform independent of Visa and Mastercard takes hold. The interconnection between Bizum and Wero, with the backing of the European Central Bank (ECB), paves the way for a sovereign alternative that could displace the US giants. But how would this impact European consumers, merchants and banks?

Towards European Financial Sovereignty
For years, the ECB has been pushing for a unified payments system to reduce dependence on foreign providers. The growing concern for financial sovereignty intensified after the sanctions on Russia and the exclusion of banks from the SWIFT system, demonstrating how payment infrastructure can become a geopolitical tool. In the current situation with a US government rather reluctant to collaborate with a Europe with a mostly center-left government team, this situation looks like another scenario that the European commission would like to avoid, a scenario of a foreign country imposing tariffs on high-need banking services. With the alliance between Bizum, Bancomat Pay (Italy) and SIBS (Portugal), and the integration with Wero, Europe could finally have a pan-European system for digital payments, reducing costs and ensuring greater security.

Consumer and Merchant Impact
If Visa and Mastercard were to disappear from the European payments ecosystem, consumers would have to migrate to European cards and digital wallets. This could initially create friction for international merchants that rely on global payment networks, but in the long term would offer more competitive rates and smoother transactions within the EU. The challenge would be global acceptance of these new solutions. While European platforms could dominate the domestic market, the lack of agreements with merchants outside the region could limit their functionality for international travel or purchases. So, although it is a long-term European solution, at this stage it does not appear to have much depth at the moment in the eyes of Visa or Mastercard, the two largest service providers in the West. Another plausible paradigm would be for the Brics environment, in Latin America, Africa and the Middle East, to adopt this new European service, which could facilitate the diversification and competitiveness of this new ecosystem.

Implications for Banks and the Financial Industry
For European banks, the elimination or reduction of cards from Visa and Mastercard providers could result in greater independence and control over transaction fees. However, banks will have to invest significantly in adopting this infrastructure and ensuring its compatibility with other payment systems. On the other hand, fintechs and neobanks could take advantage of the transition to capture customers with innovative payment services, accelerating the digitization of the sector. Companies that pivot between the UK and Europe and are of this nature will probably have to adopt this service, so the UK will have to end up linking this service if it wants its customers to use cards in this region if this happens.

Is a Blocking of North American Services Viable?
Although the possibility of a blocking of US payment services by European banks is speculative, it is not impossible. The creation of a fully independent European payments ecosystem could be seen as an economic protection measure, but it could also generate trade tensions with the US.
Europe faces a crucial decision: remain dependent on global payment leaders or build its own financial giant. The outcome of these negotiations could redefine the way millions of people manage their money in the future.

Technical Analysis VISA(Ticker AT: V.US) /Mastercard (Ticker AT: MA.US)
If we look at both companies they have performed quite similarly. Both have had a very strong upward momentum since January 13 with the new Trump administration, causing them to break out of the sideways range of late November last year with a boost from annual earnings expectations. And following the earnings release the share price of both companies has soared with similar “hype”. At the moment with a pessimistic market there has been a relatively strong correction of -4.80% for Visa and -5.31% for Mastercard placing them at 352.54 and 558.30 respectively. At this moment they are located in a similar price consolidation zone, the crosses of averages continue to indicate price expansion, RSI has reduced its overbought to 56.72% and 50.15% respectively. Although the former has its bell shaped triple and the strongest demand is located in the previous sideways range between $290 and lows of $252 and its control point (POC) around $276. The second has a double bell configuration with its POC around $527 above the previous range. So the outlook for Visa on a technical level looks slightly lower than Mastercard, although in both cases it currently looks like one of the winners in the market on a long term perspective.







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