Don’t Imitate – Innovate! Why Europe Doesn’t Need a Rival to Visa and Mastercard

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Publication Date May 2021
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To achieve ‘payments sovereignty’, the European Commission and the ECB are pressuring European banks to create a new European card network, to compete with Visa and Mastercard. This reflects the EU’s all-too-common approach to strategic autonomy, which aims to replicate foreign successes rather than to innovate. The payments plan is similar to other plans to onshore semiconductor manufacturing and to create a cloud computing solution that would compete with US giants. But ‘European champions’ cannot be viable competing against businesses that enjoy global economies of scale, unless the European solution is innovative. The problem is most apparent in fast-moving technology sectors: by the time European stakeholders get behind a ‘champion’, the market will have moved on. The Commission’s hopes for a European card network illustrate these problems.

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European Commission: COM (2020) 592: Communication on a Retail Payments Strategy for the EU

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