The «bomb» which dissolves the global financial system
Last month, Jamison Greer, top commercial official The USA, He complained that the Pix, the Brazilian direct payment system puts American companies at a disadvantage such as Visa and Mastercard.
The United States States They proposed to impose an additional 25% duty on Brazil in response.
However, Brazilians seem not affected.
«Pix is a Brazilian achievement and we are not going to abandon it», replied Luis Inacio Lula da Silva, president of Brazil and frequent critic of American power.
Even his right opponent, Flavio Bolsonaro, said he is not willing to resign from the system.
Instead, he proposed a compromise whereby Brazil would commit itself not to link Pix cross-border payment infrastructure competing with American.
This episode reflects the new geopolitical reality of the global financial economy.
As America applies what the Scott Bessent, Minister Economic The USA, recently described as «economic state policy in the 21st century», in which global access to the dollar and the American economy «no longer unconditional», while other countries are trying to respond by corresponding measures, the global financial system is fragmented into regional and national systems.
This is the case first in the field of payments — and is a headache for Visa and Mastercard, the American dipole that dominates the industry.
In January, the Aurora Lalook, President of the European Parliament's Economic and Monetary Affairs Group, warned that a hostile America could easily cut off the continent's access to payment infrastructure.
«You can't say you weren't warned.», he said, arguing that Europe must create its own alternatives.
A few weeks later, a group of UK bank officials reportedly met in London to discuss the creation of a British competitor of Visa and Mastercard.
«It is important for all of us to have control over digital payments», stated the Christine Lagarde, President of the European Central Bank, in a radio interview earlier this year.
Fear of payment networks has been limited until recently to countries which have «stressed geopolitical relations» with America, notes John Collison of Stripe, a paying company.
Following the imposition of US and European sanctions which cut off the Russia from international payment infrastructure, the country turned to its own message system (SFPS) and its own card network (Mir).
The China has also created its own cross-border infrastructure, both through state initiatives and through the expansion of private colossae, notably Alipay and WeChat Pay, fearing American sovereignty.
They are no longer exceptions.
Today, diversification from America is «a strong desire for policy makers in almost every country», says Eshwar Prasad of Cornell University.
Although much of the debate has focused on the dollar role, governments increasingly view payment infrastructure as a more realistic path to independence.
THE Su Gao, its economist Bank of China International, He argued in May that, instead of focusing China on converting cross-border flows into Yuan, it should give priority to «ensure that China has secure international payment channels» and «global expansion of the renminby payment network».
Those who seek to diversify the infrastructure on which they travel cross-border Their payments have several options.
One of them is the creation of domestic systems.
Typically they are quite recent European projects, which accelerate after years of delays.
THE Single Euro Payments Area (SEPA), a set of infrastructure for euro payments now numbers 41 member countries.
A coalition of European banks and financial technology companies supports Wero, a digital portfolio system aimed at uniting national direct payments systems, such as iDeal, a Dutch platform.
«It is simple, seamless and Made in Europe», boasts the platform website.
The ECB also hopes to launch a digital euro issued by the central bank by 2029.
Another option is removal from American systems and turning towards those associated with the other superpower.
Bank of China has recently added dozens of countries to the digital yuan system for cross-border transactions, notes Josh Lipsky of the Atlantic Council, a think tank.
In March, the Chinese Transboundary Interbank Payments System (CIPS), an alternative to the SWIFT interbank network, which is based in Belgium but dominated by American interests, channelled amounts-record of 920 billion yuan ($134 billion) into average daily flows, scoring an increase of 20% over the same month of the previous year.
In April it achieved a new historical high in the daily volume of transactions, up to 1.2 trillion yuan, according to FXC Intelligence, a data provider.
A third option is to avoid international projects in favour of bilateral agreements.
The United Payments Interface (UPI), India's payment system based on QR codes currently operates in nine other countries, while several more are in the process of accession.
THE Ritesh Shukla by NPCI International, which manages UPI's international efforts, says his team has «a rich road map» for further expansion, both through the interconnection of existing systems and through assistance to countries to develop their own.
«The promise of our brand is that we will make you sovereign in order to fulfill your own domestic commitments and promote your own national agenda.», notes.
The vast majority of cross-border payments continue to go through American payment infrastructure (or infrastructure to which the United States has access).
However, bilateral and multilateral agreements linking national payment systems, such as Pix and UPI, may allow countries to protect significant trade flows from existing card systems and banking response systems, Mr Prasad says.
In the short term, insufficient liquidity in some currencies may limit the volume of payments in these corridors.
Finally, innovations in digital money may allow much more retail payments to completely bypass existing channels.
However, in the medium term, established players in the payment area are likely to feel the pressure.
Time for retaliation
The rise The «Sovereign» payment systems, particularly in Europe —An area which is an important source of its international activities Visa and Mastercard— could erode their enviable operating profit margins, which exceed 50%.
In their latest annual reports, both companies reported as a risk to their activities. «preferential» treatment of domestic payment systems.
This may be one of the reasons why investors have recently appeared wary of the two giants, despite their strong economic results.
After a steady rise that began in 2023, their stock prices have declined in the last year.
THE Oliver Jenkins, Chairman of Visa for global markets, he states that he travels around the world to assure governments that the company takes local concerns seriously.
In May, the Visa announced an investment of 500m euros (571m dollars) in European infrastructure, including a technology centre in Poland, which is expected to operate in 2027.
In April, the company's management also announced cooperation with UnionPay, a Chinese payment company, aimed at providing real-time payment services to China.
The MastercardFor its part, it also hastens to protect its activities from geopolitical changes.
«A European payment network already exists and operates for the benefit of Europe.
This network is Mastercard», wrote in 2025 Kelly Devine, president of Mastercard's activities on the European continent.
To support these claims, the company builds three data centres in France, a total investment of EUR 250 million, adding them to the approximately twelve facilities already available in Europe.
Turning to economic and technological development «sovereignty» It may cause problems not only for giants of payment cards.
The Financial Stability Board, an international organisation that monitors progress in cross-border payments, estimates that system fragmentation will likely prevent the G20 team from achieving the international targets set in 2020 for payments —In particular as regards faster and cheaper transfers of money.
However, the most serious risk, according to Lipsky, is that the pursuit of sovereignty in the area of payments can at some point lead to the development of different regional systems that will not be compatible with each other.
This would increase the risk of financial fraud and the avoidance of sanctions.
At the same time, it would hit the world economy.
A report by funded from SWIFT (and drafted by Economist Impact, our subsidiary) estimates that, if current trends continue, financial fragmentation could reduce global GDP Case 2,6% up to 2030.
Countries may find that the price of sovereignty in payments is higher than they estimate.
The same can apply to America.
www.bankingnews.gr
