Preamble and full disclosure. The topic I’m writing about in this post is somewhat connected to my employer, Meta Platforms (i.e. the parent company of Facebook and WhatsApp), who dabbles in payment rails in certain markets, and has dabbled on a larger basis before. I am not involved in any of those products, have no insider knowledge of their internal work, or their communications with the various regulators, consortiums, or national agencies. My former employer (Google — and before someone complains, no I never worked for Alphabet, those are separate companies) also runs a payment processor service, and I still hold some of the stock I was granted during my tenure there. I also own (a very small amount of) stock in Visa Inc. and Wise – both of which obviously have stakes in the topic – as art of a diversified portfolio. I’m not here to offer financial advise.
Second preamble. This was written well before the most recent geopolitical development and speeches. I guess they make this post particularly topical, but not in the way I was originally intending.
“How does it look?” he said.
Good Omens
The assistant Head of Wages turned a haggard face toward him. “Pretty bad,” he said. “The bullet went through nearly all of them. Access, Barclaycard, Diners—the lot.”
“It was only the American Express Gold that stopped it,” said Wethered.
They looked in mute horror at the spectacle of a credit card wallet with a bullet hole nearly all the way through it.
“Why’d they do it?” said a wages officer.
For many, different, and obscure – sometimes even to me – reasons, I have always had curiosity of how different payment systems and methods worked. It should surprise nobody that I now understand that the industry term for these are “payment rails”, but that’s not the word most people think of when talking about this. This is how I ended up talking about payment cards so much, and how I can randomly bring up a blog post from 2008 in 2025, when discussing European payment options — in no small part because I’m a proud European (despite the British passport), though I have a few bones to pick with the current state of the European market.
Which means I actually end up devouring articles in the FT that cover the British and European efforts to break away from the “hegemony” of the three (though, honestly, mostly two) big payment circuits that make (electronic) money go around in Europe: Visa, MasterCard, and – very far behind – American Express. But almost every time the answer is the same: people stick to these three (or primarily the first two — American Express is expensive and doesn’t really offer enough advantages for most people) because they work, which is more than you can say for a whole lot of alternative offerings.
When you visit a store, or a restaurant, in the UK, or (by my experience) most of Europe, you only really get two questions: “cash or card?” There are a few places where they might make differences between credit and debit cards, but that’s fairly rare in my experience (more likely in Italy than anywhere else I’ve been.) A lot more common is to be told they do not take American Express — usually after you tap your phone and it errors out, if you have one and set it by default.
Aside, not everyone appears to know this, and to be honest I don’t have enough understanding of the whole chip-payment-cards protocol to explain it correctly, but there are quite a few different “protocols” that payment cards and devices (phones, watches, other trinkets) use to talk to the payment terminal (or, nowadays, phone!) of the merchant. This means that even though a particular terminal does accept American Express, it does not mean that you’ll be able to pay with your phone using American Express. In particular, the physical American Express card, inserted or used contactless, an Android phone, and an iPhone, are using four different ways to negotiate the payment, and there’s no guarantee all of them are going to be accepted. Which makes life fun if you go just by the stickers on the window of a store!
I’m personally not a fan of cash payments — even when I was running my own business, for me receiving cash was painful: it required me to go and visit the customer to pick up the money, and then (particularly when the amount was non-negligible) spend a morning to go and deposit it to my bank. Even bank payments were sometimes messy for me, as a few customers tended to be… slow in paying. Once I had the opportunity, I definitely have gladly set up PayPal payments for my invoices — despite losing the processing fee, knowing that the money would become available for me on a known timeframe was a significant quality of life improvement.
I was a consultant though, so it’s a different set of issues than those suffered from a shop or restaurant, where people are are bringing in the cash themselves. In that case, the timeliness of the payment is a lot less of a concern. There is, though, a matter of trust: if you never worked retail, you wouldn’t believe the amount of people paying with high denomination banknotes on a given day — and every one of those is worth checking, since you don’t (by default) have a trust relationship with your customers. And then you still need to convert (most of) that cash into a bank deposit if you want to pay your suppliers.
Either way, even without bringing up the type of strictly-cash arguments that certain fringes across the world use, there are reasons to complain about our current binary choice: while strictly speaking “card” is still a multiple-choice path (the obvious ones being debit or credit? Visa, MasterCard or American Express? — but there are more, as noted above as well), the expectation most people is that it doesn’t really matter: a card is a card is a card to them. And for the most part that is the case for the specific situation of credit cards in Europe: Diners (which I remember from Topolino comics back in Italy!) is, to the best of my knowledge, not a thing anywhere anymore, and Discover is barely accepted, and possibly issued even more rarely than American Express in Ireland.
Things are, or at least were, fairly different for debit cards. Just like I discovered back in 2009, when my Italian debit card, with a very large Maestro logo on it, was not accepted by TfL despite them having a matching Maestro logo. Turns out, MasterCard operated two distinct, separate circuits called Maestro: a European-wide debit card circuit, which most Italian banks, including mine, participated in, and a UK-specific debit card circuit — which I believe was a competitor for Access, but that was well before my time.
The reason why Maestro was necessary at the time, was that in most countries, including Italy, debit cards weren’t standardised. The Italian system, named PagoBancomat (where Bancomat is the name of the Italian inter-bank ATM circuit — no, not that ATM circuit, netheads!) wouldn’t be able to operated outside of the country without an appropriate federation to a wider network, thus most banks signing up for Maestro (for across Europe) and Cirrus (further out internationally.)
This separation of the “national debit card circuit” from the wider Visa and MasterCard network was the natural cause of a bunch of places, particularly outside of the tourist paths, not to take credit cards for the longest while: you could take debit cards with just the national circuit without having to take MasterCard — though if you wanted to take Maestro, unless my memory fails me, you had to sign up for taking MasterCard (by which point you may as well take Visa, too.)
Eventually, through the idea of Europe as a single market, and the inability to use debit cards such as PagoBancomat through the Internet (even though Maestro tried), many countries (including at least Italy, Ireland, and the UK, all of which I lived in at some point), switched to issuing debit cards that piggybacked the existing MasterCard and Visa circuits, which is the situation I’ve been in, ever since I left Italy.
There is an interesting possible tangent, if you want to take, about how Visa Electron (vastly used as a pre-paid card) became commonplace in Italy because of Poste Italiane and their PostePay prepaid card, which was the first online payment method for most of Italians my age and older. And how Visa attempted a different path through their VPay circuit to complete with Maestro, but… it’s not the topic I want to write about.
But what this means is that, for the purpose of being able to pay for goods and services across all of Europe (whether you’re thinking of Europe-the-continent, or the European Union), you’re almost entirely bound to Visa and MasterCard (I’m going to ignore American Express going further — they’re definitely a player in the market, but not one that most people need and I don’t think it’s part of the duopoly most people think of when they think about electronic payments in Europe.)
You can see how you don’t need to be an autarchic or have significant anti-American feeling to feel that having the European retail and consumer electronic money movement to depend on two foreign, American companies, is not a particularly good state for the European project altogether. The UK, being outside of the European Union after Brexit, doesn’t strictly have the same pressure to come to an explicit answer, but it’s still not a good look if, despite having previously innovated the retail finance sector a lot, you end up left behind by your largest partner.
This is a lot of context you need to have as for why all of those articles are written, and why the ECB and the various banking bodies in the UK are looking at alternative electronic payments systems, particularly when it comes to retail payments. Faster Payments (in the UK) and SEPA transfers have mostly solved the bank-to-bank transactions across the respective markets, and companies such as Wise and Revolut have definitely facilitated cross-border transfers particularly outside of the Eurozone. But when you get into a store in Manchester, Bologna, or Kaunas, your options tend to be just the same: cash or card?
Speaking of Lithuania for a moment here, it is an example of a different phenomenon that has appeared on the scene about at the same time as the UK banks attempted to make Pay-by-Bank a reality. When I tried buying a new cellphone for my mother in law in November, I found out that the electronics retailer I was most aware of (Topocentras, Euronics Group) does indeed have a long list of payment methods in addition to cash on delivery (not available, and not practical for this), and credit card. I mostly noticed because multiple of my British cards kept getting refused, despite me approving the payment on their respective apps. Unfortunately none of those options are available without a local bank account. Even the Revolut payments are only available to Lithuanian Revolut users (residency, not citizenship, I expect.) What this means is that there already are many non-USA-dependent payment rails available to consumers… it’s just that none of them are aligned with the single European market, fragmenting it further, and giving headaches and heartburns to those who have hopes in an Europe able to tear down barriers, such as immigrants/emigrants/expats as both me and my wife are.
All of this added an additional layer of curiosity and exploration to the trips that my wife and I took to Japan (in 2024) and Taiwan (in 2025) — because that’s definitely not the same in there. Indeed, for foreign visitors both countries are significantly more cash heavy than any country in Europe I visited, and even more so than the United States. I single out foreign visitors because, even though there are a large number of cash-only establishments, the vast majority of our cash disbursement was in stores and restaurants that are not cash only, but do not take credit (or debit) cards.
Both countries (and similarly a number of other countries in Asia), have a selection of third options, though for both of them there’s only one that is easily accessible to non-residents: stored-value cards (Suica and its partners in Japan, EasyCard in Taiwan — generally referred to as “IC cards”), originally introduced for public transport ticketing, are often accepted as a form of payment in stores, for vending machines and so on. But as the name implies, these cards are closer to cash-equivalent than to debit or credit cards — there’s no registration on the card, and you have to top it up with cash any time you’re low on value.
Usage of IC cards appear to be waning down — at least in Japan, compared to my first two trips, I found that many vending machines stopped accepting IC cards altogether, and that is despite their improved public transport coverage. During my first trip, my Suica, from Tokyo, couldn’t be used for (if my memory serves me correctly) Hiroshima busses — but in 2024 that was not a problem. And my wife’s Nimoca, from Fukuoka, worked everywhere IC cards were accepted, during that trip. (Funnily enough, the local train between Gifu and Mino only took Visa cards, no MasterCard, no ICs! That was the one place where we ended up relying on Revolut during the trip.)
What instead appears to be commonly in use nowadays is QR-based payments. Many people have heard of WePay and AliPay in Mainland China – and probably saw the AliPay logos in a number of touristy destinations in Europe, as it appears to be available (at least merchant-side) in many other countries, facilitating the purchases by mainland Chinese tourists. Japan’s LINE Pay (which is also available in Taiwan, and as far as I can tell is actually just fronting another service, like PayPay in Japan) follows the same concept, and is, for what we could tell, the most commonly used payment service throughout both countries, similarly to how WePay and AliPay are the primary payment service in mainland China (and in smaller part Hong Kong.)
To the best of my understanding, all of these payment services are tied to bank accounts in the respective country, and thus can only be accessed by residents who have said account, or at least phone numbers. LINE in particular appears to effectively disable most of their app’s services outside of their primary markets (Japan, Taiwan, Korea, Hong Kong, and Thailand), to the point that you cannot even create an account with a phone number, you can only do so with a Google or Apple account (and good luck if you didn’t transfer the account when changing phone!) Which is more than just annoying — a lot of places in Taiwan would have been much happier for us to self-service through Line, but there’s basically no path for that for foreign visitors.
When I complained about this on Threads, I expressed my annoyance of these services being unavailable to foreigners, and I was rightly corrected that the problem is not about us having a non-Taiwanese passport — the problem is that we’re foreign visitors, and thus don’t have local bank accounts and phone details. The problem remains, though. And as tourists, we also had it overall not bad – most of the touristy places expect foreign visitors and accept foreign credit cards (Visa and Mastercard primarily) – I would probably be many times more annoyed had I have been there for business, as even coffee shops in Taipei, in the less-than-touristy areas, wouldn’t take our cards.
I have to admit I really wanted to be able to at least try the payment by QR code, during both visits, and was bummed nobody let us even install the apps. PayPay (which is developed by the same company that owns LINE) is supposedly available to Italians, but I guess they region-locked the app to Google accounts that are based in Italy, rather than try to do that at the identity level — probably for the best, in terms of support and user failures.
There were only three services for which I could use some sort of QR payment, two of them taxi apps (Go Taxi in Japan, 55688 in Taiwan), both of which offer to link your curb-side (or hotel-handled) hail to the app’s account system, and pay with your connected payment method (which in our case only could be card.)
The last one was Ito En‘s app – yes, the tea company – which I was quite happy to see let me install the app and set up payment through a foreign card — even though the whole interface was only available in Japanese, which meant I used my wife’s phone with Google Translate to set it up. The main reason why I wanted to set this up, by the way, was that almost exactly at the time we were in Japan, Ito En was running a promotion with Pokémon Go, granting a special quest when buying a certain amount of drinks — so in addition to the free drink after buying 10, I wanted to collect enough drinks to get two promotional codes (one for me, one for my wife.)
The Ito En app, though, is less like LinePay, and a lot closer to the Yoyo Wallet that (among others) Caffé Nero uses in the UK: it’s a loyalty card that fronts a payment method. Both work effectively the same: you scan a QR code that both takes the payment, and counts for your loyalty card — then the charge is applied to your selected payment method, for me obviously that’s always a credit card, once again. It does show, though, that taking a payment by QR code is not so uncommon that it couldn’t work in the UK.
But it also shows another useful point: in addition to have to be very practical, while safe (how long does it take me to unlock the phone, unlock the app, display the QR code? as it turned out, Ito En wasn’t practical at all, at least without understanding the Japanese, I don’t know if there was a way to display the QR code faster), these payments need to have a little more for consumers to prefer them to the credit card they got used to (in this case, the Pokémon Go promotion.)
Let me take another small example from the more recent past. During the 2025 Winter Holidays season, there was a small “Winter Fayre” event at our local village. At this fayre, there was a Nigerian food stall, and my wife loves Nigerian food, so we grabbed two portions of jollof rice to go. Payment by cash or bank transfer — and that wasn’t the easiest! First, our area has terrible network coverage, but thankfully my phone had network. Second, to pay a new person with my primary bank account, I need to take a picture of my face for them to confirm my identity. Of course I could have used Revolut instead, which would have been happy with just my fingerprint, but the fact that at least some banks have higher attrition to make the payment is a clear indication that currently, in the UK, you wouldn’t be able to switch retail to pay-by-bank.
Ironically, this might have worked had it come some eight years ago or along those lines — that is, before the widespread adoption of Square, SumUp, and PayPal card payment terminals with no monthly fee. Fayres, events and cons, and smaller retailers who would have never bothered signing up for a “normal” POS terminal from a large business bank were effectively relieve from having to find an alternative cashless payment method when those came to the scene. The fact that already by 2025 a few business “neo-banks” (even if Revolut isn’t quite one) started taking card payments directly from a phone (which I first saw happening with a Ukrainian bank at the UA Comix stall!) makes it even less likely for pay-by-bank to be of interest in terms of providing a service for the merchants.
So what is on the table for the consumers, to pay with something different than a credit or debit card? Well, pretty much nothing right now. Pay By Bank is at best a replacement for debit cards — if you’re used to handle your own budget, and pay off all your credit cards at the end of the month, you have nothing to gain by switching to Pay By Bank and a lot to lose: the additional active interest for the up to 45 days you hold onto your money before it’s taken from you, any cashback and point offer, and any of the purchase protections that credit cards offer today.
But as I said above, there’s something that time and time got me (and countless other people) to do something inconvenient: rewards! In my case the carrot was the Pokémon Go quest voucher, but both LinePay in Japan, and some of the alternative payment networks in Taiwan, is that they allow you to collect points — and not for cashback, but for seasonal merch that cannot be acquired directly otherwise. It might be a bit too Asian of a thing, but when we were in Taiwan there was a Miffy collection that a friend of ours would have loved for us to be able to collect, but nope, foreign visitors don’t get access to that.
Ironically, the closest to what I read the various banks association want, appears to be… PayPal. It’s an electronic money provider that can store value, but can also front a transaction through a bank, and it does have a QR-code payment system too! They even recently introduced a loyalty program in the UK! But it’s yet another American company, and not something that would help with “sovereignty” issue the European Union is interested in, and generally not much of a help to the UK weaning off Visa and MasterCard either.
I find the PayPal+ rewards something… interesting. My read of this is that PayPal has been losing ground as a payment method. I know for sure that I’m at the point where I hadn’t been using PayPal much unless it had an upside for me, such as 0% instalment plans. It used to be that PayPal was among the easiest and cheapest payment processor for web payments, so it was easy for developers of websites and apps to just integrate with it and be done with it. But that time has passed some time ago. Apple Pay, GPay, Shop Pay (from Shopify), Stripe, even Amazon Pay — they all started gaining popularity and provided even easier integrations (if you set up a Shopify shop you literally do nothing to take the payment!)
It is, though, quite surprising that the threshold for their Gold tier is 25000 points, equivalent to £250k spend per year. Having that amount of disposable income to spend at all puts you well above the “1%” in the UK. To transit that kind of money through PayPal, well, let me just say I’m not in a position to understand that, despite me and my wife having just bought a house. Make it what you may.
So do I think we’ll ever break out of the almost de-facto duopoly of Visa and MasterCard, in Europe? I honestly have my doubts unless there’s going to be enough of an appetite for regulatory changes at a Common Market level. At the very least, you would need the payment rail to promise the same level of consumer protection as a credit card – which is likely going to make this a lot less interesting for banking associations – and allow enough of a carve-out of fees for some kind of loyalty or cashback program — which is likely to upset merchants.
So I’m not holding my breath — maybe one day LY (the company behind Line) might decide that Europe or the UK are a worthy market for their services, and that will trigger a cascade effect. I just don’t know the incentives are aligned between regulators, banks, merchants, and consumers.