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13:13 20.07.2026 •
Last month Jamieson Greer, America’s top trade official, complained that Pix, a Brazilian instant-payments system, unfairly disadvantages American firms such as Visa and Mastercard. America proposed an additional 25% tariff on Brazil in response. Yet Brazilians seem unmoved. “Pix is a Brazilian achievement and we will not give it up,” replied Luiz Inácio Lula da Silva, Brazil’s president and a frequent critic of American power. Even his right-wing rival, Flávio Bolsonaro, said he was unwilling to forgo the system. Instead he has suggested a compromise in which Brazil would promise not to link Pix to cross-border payment infrastructure that competes with America’s.
The episode captures the new geopolitical reality of global finance, The Economist stresses. As America pursues what Scott Bessent, the treasury secretary, recently described as “economic statecraft in the 21st century”, in which global access to the dollar and the American economy is “no longer unconditional”, and other countries try to respond in kind, the global financial system is splintering into regional and national systems. This is happening first in payments—and presents a headache for Visa and Mastercard, the industry’s American duopoly.
In January Aurore Lalucq, the chair of the European Parliament’s economic- and monetary-affairs group, cautioned that a hostile America could easily cut off the continent’s access to payments infrastructure. “You won’t be able to say you weren’t warned,” she said, arguing that Europe must build its own alternatives. Weeks later a group of British bank bosses reportedly met in London to discuss building a British rival to Visa and Mastercard.
“It’s important for all of us [to] have digital payment under our control,” said Christine Lagarde, the president of the European Central Bank, in a radio interview earlier this year.
Fear of Western-led payments networks was until recently confined to countries that have “fractious geopolitical relationships” with America, notes John Collison of Stripe, a payments firm. After American and European sanctions cut off Russian access to international payments infrastructure, it shifted onto its own messaging system (SFPS) and card network (Mir). China has likewise built its own cross-border infrastructure, both through public initiatives and the expansion of private giants, notably Alipay and WeChat Pay, fearing American dominance.
They are no longer outliers. Today diversifying from America is “the ardent desire of policymakers in practically every country”, says Eswar Prasad of Cornell University. While much discussion has focused on the dollar’s role, policymakers increasingly see payments infrastructure as a more viable path to independence. Xu Gao, an economist at Bank of China International, argued in May that, rather than focusing on converting cross-border flows to yuan, China should prioritise “ensuring that China has secure international payment channels” and “expanding the renminbi payment network globally”.
The vast majority of cross-border payments still touch American rails (or ones to which it has access). But bilateral and multilateral deals linking national payments systems like Pix and UPI may allow countries to shield significant flows from existing card and correspondent-banking systems, says Mr Prasad.
Payback time
The rise of “sovereign” systems, especially in Europe, a big source of Visa’s and Mastercard’s international business, could erode their enviable operating margins of over 50%. In their latest annual reports, both companies brought up “preferential” treatment of domestic payments systems as a risk to business. That may be one reason why investors have lately been lukewarm about the two giants, despite healthy earnings. After a sustained climb starting in 2023, their share prices have declined in the past year.
Oliver Jenkyn, Visa’s president of global markets, says he has been travelling around the world to reassure governments that the company is sensitive to local concerns. In May Visa announced a €500m ($571m) investment in European infrastructure, including a technology centre in Poland set to open in 2027. In April its bosses said they were teaming up with UnionPay, a Chinese payments firm, to offer real-time payments in China.
Mastercard is also rushing to protect its business from geopolitical shifts. “A European payment network exists today operating for Europe’s benefit. That network is Mastercard,” wrote Kelly Devine, the president of Mastercard’s business on the continent, in 2025. To back up such claims, the firm is building three data centres in France to the tune of €250m, adding to the dozen it already has in Europe.
The turn towards sovereignty may cause problems for more than just card giants. The Financial Stability Board, an international group that has monitored cross-border progress, reckons that fragmentation will probably prevent the G20 group of large economies from achieving international payments goals—particularly faster and cheaper remittance payments—that it set out in 2020.
But the more serious risk, Mr Lipsky notes, is that countries’ pursuit of payments sovereignty may one day mean various regional systems become incompatible. A report sponsored by SWIFT (and compiled by Economist Impact, our sister company) estimates that, if current patterns continue, financial fragmentation could shave 2.6% off global GDP by 2030. Countries may find that the price of payments sovereignty is higher than they reckon. So may America.
…Look how London is twitching!
The destruction of the unified global payments system will deprive both Americans and Brits of the fabulous income they have earned by creating a payments network that spans the entire globe. And the world really doesn't like this network — a political noose.
The world has begun to tear this network apart, and London is already panicking.
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