Invest1 publisher3 min readPublished
Digital euro mandate hands eurozone merchants a free alternative to Visa and Mastercard by 2029
Eurozone businesses must accept the digital euro by 2029, a free payment option aimed at the 47% of card payment value that Visa and Mastercard process. Adyen, a pilot member, says merchant demand is still thin, so the networks are likelier to feel it in their fees before their share.
The Investor · Invest desk
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What happened
- A 12-month pilot is due to start in the second half of 2027 with 36 finance firms, including Deutsche Bank, Revolut, Adyen and UniCredit.
- According to the ECB, 15 of the euro area's 21 countries still lack a domestic digital payment solution, and no European scheme works seamlessly across the bloc.
- In May 2025, trade groups for retailers including Amazon, Carrefour, H&M and Ikea asked the European Commission to curb card-scheme fees, citing a 33.9% rise from 2018 to 2022.
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Why it matters
- cost Visa and Mastercard's fee growth, about 7.6% a year on the retailers' own figures, gets harder to sustain once every merchant must hold a free rail it can steer customers toward.
- constraint Because the pilot ends in the second half of 2028 at the earliest, merchants and processors have to start integration work before the test results are in.
- decision Retailers that lobbied over card fees in 2025 can now negotiate with Visa and Mastercard against a mandated free alternative, before any pilot shows whether customers will use it.
- exposure Card volume is most exposed in the 15 countries with no domestic digital payment solution, where the digital euro would arrive without a home-grown competitor.
A payment network needs merchants who accept it and people who choose to pay with it. The 2029 rule settles the first of those by law, requiring businesses to take digital euros in-store and online [4], and the ECB presents the currency as free and universally accepted [6]. The rule, as Fortune reports it, binds businesses. GlobalData's 47% figure for Visa and Mastercard is a share of eurozone card payment value in 2025 [5]. It falls only when someone standing at a till that already takes their card picks the new option instead.
The calendar leaves little slack. The pilot starts in the second half of 2027 and runs 12 months [3], so it ends in the second half of 2028 at the earliest [1], the year before the acceptance deadline [4]. The politics are further along than the product. In June, Gilles Boyer, a French MEP, said "Payment systems are not neutral; they are instruments of power" [1], and the same day the Parliament's economic affairs committee voted 43 to 14 for the digital euro [2], about three-quarters of those voting [4]. Fortune does not report a vote of the full Parliament.
One outcome is that people keep paying by card and the share barely moves. Merchants would still have a free rail that avoids interchange fees and settles instantly [10], and that limits how far the networks can push price. Trade groups representing Amazon, Carrefour, H&M and Ikea told the European Commission in May 2025 that card-scheme fees rose 33.9% between 2018 and 2022 [9]. That is about 7.6% a year, compounded [2].
Another outcome is that the digital euro wins volume in the countries that lack a domestic option. The ECB counts 15 of the euro area's 21 countries in that position [7], leaving six that have one [3]. A third is that it ends up as a standby system few people use. Radi El Haj, chief executive of RS2, a payments technology firm in the pilot, said "It won't be easy to replace any of the existing payment methods overnight if one of the big networks decides to shut down in Europe" [15]. Carlo Bravin, head of payments partnerships EMEA at Adyen, said "While it's still too early to see strong merchant demand for the digital euro specifically, there is consistent demand for choice and flexibility" [11]. Worldline chief executive Pierre-Antoine Vacheron said: "It's not a revolutionary improvement, it's a genuine gap-filler" [12].
I think the first outcome is the likeliest in the years right after 2029. A mandate can make a merchant accept a payment method. It cannot make a customer use one, and the pilot members quoted above are describing a modest product. The counter-case is the second outcome: if the 15 countries without a domestic option [7] take up the digital euro as their first one, card share falls from the 47% baseline [5] and the networks lose volume as well as pricing power. A GlobalData share several points below 47% in the first full year after the deadline would show this view is wrong.
Mastercard's public response is to stay put. Kelly Devine, president of Mastercard Europe, said the company has been "part of Europe's economic fabric for decades" [13], and it plans to keep investing in Europe [14].
What to watch
- A vote of the full European Parliament on the digital euro, following the economic affairs committee's 43 to 14 vote.
- Transaction volumes from the 12-month pilot with 36 firms due to start in the second half of 2027.
- GlobalData's eurozone card value share for Visa and Mastercard after the 2029 deadline, against 47% in 2025.