Europe, home to more than 9,000 fintechs, and the US, home to more than 13,000, are clashing over Fintech’s future, with the EU pushing aggressive digital sovereign regulations to break Visa and Mastercard’s payment monopoly, while US banks like JP Morgan charge digital financial companies for data access. The fintech Europe landscape is put to the test.
While European startups such as Wise, Klarna, Revolut, and Mambu have grown up in the context of more limited capital availability, US behemoths such as Stripe and PayPal have the benefit of deeper markets and institutional backing.
The regulatory divergence compounds a wide funding gap, where European fintechs only managed to raise $3.8 billion (€3.6 billion) in early 2025, compared to the American deeper capital market.
Europe wants to expand open banking through Financial Data Access (FIDA) legislation and developing its own payment system, Wero, to compete with US rails.
Cracks in Fintech Europe Market
European fintechs raised $3.8 billion (€3.6 billion) in the first half of 2025, a 23% year-over-year (YoY) increase, with the full year on track to total $8.1 billion (€7.6 billion) – still far below the 2021 high of $17 billion (€16 billion).
As the report puts it, “2021 was an aberration, a sugar-high liquidity driven bubble when venture investment reached record levels. We don’t expect to see those levels for another five to seven years, nor should we try to replicate that.”
Instead, Europe’s challenge is building sustainable ecosystems. While its companies do scale with more concrete fundamentals, the market is structurally underfunded compared to the US.
In 2025, just two deals accounted for nearly half of Europe’s fintech funding which included Rapyd and FNZ. In contrast, in the US, the two largest fintech deals equated to less than 10% of the total, with funding spread out over hundreds of Series A-C rounds.
“US public pensions and endowments invest over $1 trillion in private markets, compared with a much smaller role for European institutions,” the report highlights.
Europe’s dependence on corporate investors and government bodies is leaving mid-market firms underserved, even as the need for capital is speeding up.
The consequence is a big one. Europe now has “an estimated $318 billion (€300 billion) backlog of technology companies waiting to list,” with initial public offering (IPO) routes narrowing as companies stay private longer.
The continent compensates, though, with exits strength, nearly 1,000 mid-size tech exits occur annually, supported by private equity buyouts that account for 40% of deals in the $106 million – $530 million (€100m–€500m) range, roughly twice the US proportion.
A Fintech Showdown
Aside from funding, regulation is the latest battleground. The European Union (EU) is attempting to bust the US stranglehold in payments, where Visa and Mastercard still control about two-thirds of eurozone transactions.
As part of its Second Payment Services Directive PSD2 regime, banks are obligated to give free access to customer account data to fintechs. The EU is currently drafting Financial Data Access (FIDA) legislation to extend this obligation to credit, insurance, and investments.
US banks are moving toward “pay-for-access” models.
JPMorgan Chase already announced that it will charge fintechs for data, which has caused outrage. “If US banks turn data access into a toll road, fintechs will pay the price,” critics argue, warning of harm to startups squeezed by new fees.
The EU’s impetus is linked to its digital sovereignty agenda, aiming to reduce dependence on non-EU platforms. Initiatives such as the European Payments Initiative (EPI) in favor of Wero, a pan-European wallet, to compete directly with US payment rails.
Meanwhile, international endeavors such as the Bank for International Settlements’ “Project Aperta” are testing global open-finance architectures, with little US involvement.
Europe’s antitrust probes into Visa and Mastercard could trigger sizable fines, while Washington views EU action as targeting US firms. Analysts warn that in the absence of coordination, fintech risks are becoming another front in broader economic wars.
Both continents specifically fintech Europe grow in base, but they diverge on rules, capital, and vision in the long run. As one industry report summarizes, “What matters now is building stamina, not chasing another rush.”
Whether Europe succeeds in deepening markets and asserting sovereignty, or US institutions establish their dominance, will determine who sets the agenda for the future of digital finance.
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