In an increasingly globalized economy, local card schemes in Europe, once the backbone of their respective domestic banking systems, are rapidly losing ground to international giants Visa and Mastercard.

Key Influencing Factors

• Lack of technical innovation: Challenged to innovate at the same pace as V&MC, which leverage economies of scale and remain at the forefront of payment tech and UX.
  Fall short in enhancing interfaces, customer service, and loyalty programs.
• Slow Support of Digital Wallets: Slow to adopt and integrate the increasingly popular digital wallets (e.g. Apple Pay, Google Pay), compared to V&MC, which are quicker and more agile in implementing new technologies
• e-CommerceChannel Gap: Failed to invest in developing robust and secure online payment capabilities, resulting in a missed opportunity and increasing vulnerability in the rapidly evolving digital payments landscape.
• Limited Geo Reach: Confined to home markets and find it challenging to compete x-border.
  Local schemes often depend on co-badged V&MC networks to manage the growing volume of cross-border payment transactions.
  
• Integration Requirements: The cost of integrating Europe’s local card schemes remains high, requiring significant investment in technical infrastructure, regulatory compliance, security measures, and ongoing maintenance.
  
• Collaborative Shortcomings: While local cost-effective, local schemes struggle to forge strategic alliances with high-growth stakeholders in the payment ecosystem.
  New-to-market providers frequently default to V&MC for partnerships.
  

Please contact Yuriy Kostenko at Yuriy@FlagshipAP.com with comments or questions.