Europe’s Payment Crisis: The Case for a UPI‑Like System
When the center-left French politician Aurore Lalucq posted a warning last Wednesday that Donald Trump could cut off Europe from international payment systems, the clip went viral. To many, her message made sense. After all, if Mr Trump was prepared to test allies’ boundaries over Greenland, it is not far-fetched to imagine Visa and Mastercard becoming used against a recalcitrant Europe.
The US can turn off payment systems it controls. Russia learned this first-hand after sanctions were rightly applied for its invasion of Ukraine. As up to 60% of russian retail transactions depended on Visa and Mastercard for authorisation, the ban left many ordinary people stranded without access to funds and unable to buy goods. Under Mr Trump,America’s goal is to “help Europe correct its current trajectory”. given such talk,Ms Lalucq,who chairs the European parliament’s economic and monetary affairs committee,is not wrong in calling for an “Airbus of European payments” to protect the EU.
If the European Commission president, Ursula von der leyen, is serious about the bloc’s “independence”, then during her visit to India this week she might ask new delhi for advice. 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.
India’s Unified Payments Interface (UPI) could be the answer Ms Lalucq is looking for: a state‑backed, universal payment system. The plumbing does not need Visa or mastercard to be involved. UPI has near‑zero fees. It is not a wallet but a public standar