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 per cent 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, Flavio 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 rails that compete with America’s.

The episode captures the new geopolitical reality of global finance. 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”.

Those looking to diversify the rails on which their cross-border payments travel have several options. One is to build native systems.

Take several recent European projects, which are speeding up after years of delays.

The Single Euro Payments Area (SEPA), a set of rails for euro-denominated payments, now counts 41 countries among its members. A coalition of European banks and fintech firms have backed Wero, a digital-wallet system meant to integrate national fast payments systems such as iDeal, a Dutch platform.

“It’s simple, seamless and Made in Europe,” brags the platform’s site. The ECB also hopes to launch a central-bank issued digital euro by 2029.

An alternative is to move away from America’s systems and towards ones linked to the other superpower. Bank of China has lately added dozens of countries to its digital-yuan system for cross-border exchanges, notes Josh Lipsky of the Atlantic Council, a think-tank.

In March China’s Cross-Border Interbank Payment System, an alternative to the Belgium-based but American-dominated SWIFT interbank network, channelled a record 920 billion yuan ($196 billion) in average daily flows, a 20 per cent increase on the same month last year.

In April it achieved a new all-time high for single-day transaction volume, of 1.2 trillion yuan ($2.55b), according to FXC Intelligence, a data provider.

A third choice is to eschew international projects in favour of bilateral deals. United Payments Interface (UPI), India’s QR code-based payments system, currently works in nine other countries, with several more in the pipeline.

Ritesh Shukla of NPCI International, which runs UPI’s efforts abroad, says his team has “a rich roadmap” for further expansion, both through linking existing systems and helping countries build their own.

“Our brand promises that we will make you sovereign, to fulfill your own domestic commitments and to drive your own national agenda,” he notes.

The vast majority of cross-border payments still touch American rails (or ones to which it has access).

But bilateral and multilateral deals linking systems like Pix and UPI may allow countries to shield significant flows from existing card and correspondent-banking systems, says Mr Prasad.

In the short run, insufficient liquidity in some currencies may limit the volume of payments in those corridors. Eventually, innovations in digital money may mean many more retail payments can bypass incumbent channels entirely.

But in the medium term, the payments incumbents are likely to feel the pinch.

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 per cent.

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 €500 million ($964m) 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 €250 million ($482m), 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.

That would increase financial fraud and sanctions evasion. It would also harm the global economy. A report sponsored by SWIFT (and compiled by Economist Impact) estimates that, if current patterns continue, financial fragmentation could shave 2.6 per cent off global GDP by 2030.

Countries may find that the price of payments sovereignty is higher than they reckon.

So may America.