Europe's Struggle for Sovereignty in Payments Systems
As tensions rise over Europe's payments systems, a warning from French politician Aurore Lalucq that US President Donald Trump could cut off the continent from international payment networks has gone viral. The concern is valid, given America's proven track record of using its influence to coerce allies and impose economic sanctions.
The US can turn off payment systems it controls, as evidenced by Russia's experience after sanctions were imposed in response to its invasion of Ukraine. With up to 60% of Russian retail transactions depending on Visa and Mastercard for authorisation, the ban left many ordinary people stranded without access to funds and unable to buy goods. Trump's goal is to "help Europe correct its current trajectory," but Lalucq's call for an "Airbus of European payments" to protect the EU is a sensible response.
To bolster its sovereignty, Europe should look to India's example. Within a decade, India has built a digital public infrastructure designed to reduce reliance on foreign-controlled payment networks and insulate its domestic payments from external pressure or sanctions. The country's Unified Payments Interface (UPI) is a prime example of this approach, a state-backed, universal payment system that has near-zero fees and doesn't rely on Visa or Mastercard.
India's UPI has enabled the country to leapfrog traditional payment methods and become a leader in digital payments. While US companies dominate India's digital payments landscape, they don't control UPI. The system is open and decentralized, allowing banks, fintechs, and apps to compete on top of it. This approach has made digital payments ubiquitous among poor households and reduced the reliance on credit cards.
Creating a European version of UPI won't be easy, but it's essential for maintaining sovereignty in payments systems. The EU is institutionally complex, with banks resisting change and private sector products like Wero facing challenges. However, India's experience suggests that this approach can be adapted to Europe's needs, particularly given its mature privacy framework.
As global powers increasingly look to export their models, it's clear that Europe must take control of its own payments systems. China's Digital Silk Road may offer a tempting alternative, but it locks partners into Beijing's technology and authoritarian governance. A European payment system that bolsters the continent's sovereignty is a necessary move, and Lalucq should be commended for raising this issue.
In the end, Europe's struggle for sovereignty in payments systems begins with small, practical steps – like how we shop. By looking to India for answers, Europe can take a crucial step towards establishing its own digital public infrastructure and securing its economic independence.
As tensions rise over Europe's payments systems, a warning from French politician Aurore Lalucq that US President Donald Trump could cut off the continent from international payment networks has gone viral. The concern is valid, given America's proven track record of using its influence to coerce allies and impose economic sanctions.
The US can turn off payment systems it controls, as evidenced by Russia's experience after sanctions were imposed in response to its invasion of Ukraine. With up to 60% of Russian retail transactions depending on Visa and Mastercard for authorisation, the ban left many ordinary people stranded without access to funds and unable to buy goods. Trump's goal is to "help Europe correct its current trajectory," but Lalucq's call for an "Airbus of European payments" to protect the EU is a sensible response.
To bolster its sovereignty, Europe should look to India's example. Within a decade, India has built a digital public infrastructure designed to reduce reliance on foreign-controlled payment networks and insulate its domestic payments from external pressure or sanctions. The country's Unified Payments Interface (UPI) is a prime example of this approach, a state-backed, universal payment system that has near-zero fees and doesn't rely on Visa or Mastercard.
India's UPI has enabled the country to leapfrog traditional payment methods and become a leader in digital payments. While US companies dominate India's digital payments landscape, they don't control UPI. The system is open and decentralized, allowing banks, fintechs, and apps to compete on top of it. This approach has made digital payments ubiquitous among poor households and reduced the reliance on credit cards.
Creating a European version of UPI won't be easy, but it's essential for maintaining sovereignty in payments systems. The EU is institutionally complex, with banks resisting change and private sector products like Wero facing challenges. However, India's experience suggests that this approach can be adapted to Europe's needs, particularly given its mature privacy framework.
As global powers increasingly look to export their models, it's clear that Europe must take control of its own payments systems. China's Digital Silk Road may offer a tempting alternative, but it locks partners into Beijing's technology and authoritarian governance. A European payment system that bolsters the continent's sovereignty is a necessary move, and Lalucq should be commended for raising this issue.
In the end, Europe's struggle for sovereignty in payments systems begins with small, practical steps – like how we shop. By looking to India for answers, Europe can take a crucial step towards establishing its own digital public infrastructure and securing its economic independence.
. I mean, the US has been known to play dirty with its allies, so it's legit to want some protection 
. India's example is pretty inspiring though - their digital public infrastructure is a game changer for financial inclusion and reducing reliance on foreign systems 
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. The banks and private sector are all about maintaining the status quo, which makes it tough to get people on board with change 
. But Lalucq's right that they need to take control of their own payments systems if they want to avoid being coerced by global powers 
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. Europe needs a system that prioritizes democracy and transparency over economic gain 
. If Lalucq can get some momentum behind this idea, it could really help shift the conversation around payments systems in Europe 
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India's approach to digital payments has been a game changer, and I think Europe can learn from their example. We just need to take some bold steps towards creating our own digital public infrastructure 
The EU is at risk of losing control over its payment systems if it doesn't develop a robust domestic solution 
. By adopting a similar approach, the EU can ensure that its digital payments are not beholden to external powers 
. It's time for the EU to take control of its own payment systems and not be held hostage by global powers 
. We've seen what happens when one country tries to strong-arm another – look at Russia after those sanctions!