Europe's efforts to reduce reliance on U.S. payments giants Visa and Mastercard are being hindered by a rift between the European Central Bank (ECB) and financial firms, according to sources.
The surge in cashless payments since COVID-19 has increased the euro zone's dependence on U.S. firms, which handle nearly two-thirds of card payments in the bloc.
The ECB plans to introduce a digital euro by 2029. However, banks fear customers will shift deposits to ECB-guaranteed wallets, impacting their revenues.
Potential revenue losses for commercial banks are estimated at 8-9 billion euros annually, based on euro zone card payments worth around 3.4 trillion euros per year.
The digital euro would be legal tender, requiring merchant acceptance, which could help spread common standards across the bloc.
