David vs. Goliaths: Can the European Payments Initiative Actually Rival the Big Two?

For decades, the global payments landscape has been less of a competitive market and more of a settled duopoly. If you’re tapping your phone at a cafe in Melbourne or swiping a piece of plastic in Paris, chances are the transaction is being routed through the rails of two American giants: Visa or Mastercard.

But in Europe, a new challenger is finally moving from the "theoretical PowerPoint" stage into the "real-world execution" phase. It’s called the European Payments Initiative (EPI), and with its 2026 strategy now in full swing, the industry is asking the big question: can a consortium of European banks actually take down the Goliaths?

At Kian Jackson, we’ve been tracking the evolution of payment gateways and alternative rails for years. The EPI isn’t just another "me too" project; it’s a fundamental attempt to reclaim payment sovereignty. Let’s dive into the mechanics, the strategic hurdles, and what this means for fintech founders globally.

What is the EPI (and what on earth is Wero)?

The EPI isn’t trying to build a new credit card. That would be a fool’s errand in 2026. Instead, they are building a digital wallet and account-to-account (A2A) payment ecosystem branded as Wero.

Built on top of the SEPA Instant Credit Transfer (SCT Inst) rails, Wero allows users to send and receive money in seconds using just a phone number or a QR code. It bypasses the traditional card networks entirely. No more 16-digit numbers, no more expiry dates, and: crucially for merchants: potentially much lower transaction fees.

As of early 2026, Wero has already shown some serious muscle:

• Over 48 million users onboarded.

• €13 billion in payments processed in its first year.

• Backed by 16 major financial heavyweights, including the likes of Deutsche Bank, BNP Paribas, and Worldline.

The Strategy: Interoperability over Isolation

One of the smartest moves the EPI made recently was moving away from trying to replace existing local champions and instead choosing to shake hands with them.

The memorandum of understanding with the EuroPA Alliance is a game-changer. By aligning with local powerhouses like Bizum (Spain), Bancomat Pay (Italy), and Vipps MobilePay (the Nordics), the EPI is looking to create a unified network of nearly 130 million Europeans.

In the fintech world, liquidity and network effects are everything. If you can’t use your "local" wallet when you cross the border from Madrid to Milan, the wallet is useless for international travel: leaving the door wide open for Visa and Mastercard. By focusing on interoperability, the EPI is attempting to build a "network of networks" that can rival the global reach of the Big Two, at least within the Eurozone.

Why the Goliaths Aren't Panicking (Yet)

Despite the impressive numbers, the path to unseating the incumbents is riddled with potholes. Visa and Mastercard didn't become dominant just because they had good tech; they became dominant because they solved the "trust" problem at a global scale.

To truly compete, the EPI needs to address three critical areas where the card schemes currently excel:

1. The Dispute "Safety Net"

If you buy a dodgy pair of sneakers online with your Visa card and they never arrive, you know exactly how the chargeback process works. For A2A payments like Wero, the dispute and refund logic is still being refined. For a consumer to switch from a credit card to a bank-rail wallet, they need to know they have the same level of protection.

2. Merchant Value Proposition

Merchants care about two things: cost and conversion. While Wero might be cheaper, if it adds friction at the checkout or doesn't integrate seamlessly into existing POS systems, merchants won't push it. The EPI needs to prove that its "smart routing" can make instant payments as operationally clean as card settlements.

3. Tokenisation and Security

The Big Two have spent billions on tokenisation and fraud prevention. For the EPI to be a viable alternative, it must treat fraud as a "first-class problem," not an afterthought.

The Strategic Conflict: Sovereignty vs. Commerciality

This is the central tension at the heart of the EPI.

• The Sovereignty Narrative: European regulators want to reduce reliance on US-based financial infrastructure. It’s a matter of national security and economic independence.

• The Commercial Reality: Banks are profit-driven entities. Building and maintaining a new payment rail is incredibly expensive. If the ROI isn't there, or if the "sovereignty" requirement makes the product clunky compared to Apple Pay or Google Pay, the project will stall.

As Dwayne Gefferie notes in his analysis of the EPI 2026 strategy, the challenge is maintaining a unified brand while respecting the domestic assets that already work. If the EPI tries to force a "one size fits all" approach on countries that already love their local wallets, they risk internal friction that could derail the whole initiative.

What This Means for Fintech Startups

If you’re a founder in the fintech or payments space, the rise of the EPI creates a massive window of opportunity.

The "New Rails" Advantage

Startups that can build "value-added services" on top of Wero will be the big winners. Think about automated accounting for SMEs, instant loyalty rewards at the point of sale, or advanced fraud detection specifically tuned for A2A transactions.

Fragmentation is a Feature, Not a Bug

The transition period between "Card Dominance" and "A2A Ubiquity" will be messy. Startups that provide orchestration layers: helping merchants accept both traditional cards and new EPI-based payments: will be indispensable.

The Australian Perspective

While the EPI is a European project, the lessons are incredibly relevant for us in Australia. We have our own modern rails, like the New Payments Platform (NPP) and PayTo. Watching how Europe handles the "Scheme vs. Rails" battle provides a roadmap for how we might eventually see a shift away from card-centric payments in the Southern Hemisphere. We’re already seeing a move toward Open Banking and Open Data here, and the EPI's success (or failure) will dictate the global appetite for bank-led payment schemes.

Is 2026 the Year of the Shift?

The EPI is no longer a pipe dream. It has the users, the backing, and the technological foundation. However, to move from a "niche local alternative" to a "genuine global rival," it must master the boring stuff: disputes, merchant integration, and cross-border UX.

Visa and Mastercard aren't going anywhere tomorrow. They are masters of evolution (just look at their acquisitions in the crypto and stablecoin space). But for the first time in decades, there is a credible, bank-backed alternative that doesn't just want a seat at the table: it wants to build a new table entirely.

How Can Your Business Navigate This?

The world of payments is changing faster than ever. Whether you're looking to optimise your payment gateway strategy or explore how AI can improve your fraud detection on these new rails, you don't have to go it alone.

At Kian Jackson, we specialise in helping fintechs and established enterprises navigate these complex strategic shifts. We bridge the gap between "legacy" and "the future."

Ready to future-proof your payment strategy?

Explore our latest insights on the Kian Jackson Blog or reach out to us directly via our Contact Page. For deep-dive consulting on payment architecture and fintech innovation, visit www.rivatechconsulting.com and let’s chat about how we can help you lead the charge in the new era of global finance.

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