The world searches for alternatives.. How a Brazilian app threatens the status of Visa and Mastercard?

Every time a person swipes their credit card to pay for a meal or book a flight ticket, a complex network of messages and systems operates in the background, dominated by American companies, notably Visa and Mastercard. For decades, this dominance seemed taken for granted, but today the world has begun to view it as a strategic vulnerability.

The Western sanctions on Russia in 2022, which included cutting off Visa and Mastercard services and banning some banks from the SWIFT system, were a wake-up call for countries that realized that reliance on American financial infrastructure could turn into a tool of geopolitical pressure.

Since then, efforts to build local and regional alternatives that give countries greater control over payment systems and financial data have accelerated.

The world searches for alternatives. In Europe, officials have warned about the possibility of losing access to payment infrastructure if tensions with Washington escalate, prompting the continent to accelerate projects such as the digital euro and the launch of the 'Wero' digital wallet, which attracted tens of millions of users.

In Asia, local apps like 'Alipay' in China and 'Grab' in Southeast Asia have succeeded in building integrated payment systems based on smartphones and QR codes, far from traditional credit card networks. But the most attention-grabbing model came from Brazil.

At the end of 2020, the Brazilian Central Bank launched the instant payment system 'Pix' at the end of 2020, with a simple goal: enabling anyone with a bank account to transfer money instantly and around the clock.

In just a few years, 'Pix' has become an integral part of daily life in the largest economy in Latin America. From buying ice cream on Ipanema Beach to paying for cars and homes, 'Pix' has become the preferred payment method for millions of Brazilians.

The system is characterized by nearly zero fees. Individuals pay no fees, while businesses bear very low fees averaging about 0.22% of the transaction value, compared to over 1% for debit cards and more than 2% for some credit cards.

An experience that changed the game

'Pix' is no longer just a local payment method; it has become a huge financial force. It has helped bring more than 70 million Brazilians into the financial system for the first time, and its user base has reached about 178 million people out of approximately 213 million inhabitants.

Its transaction volume exceeded $7 trillion last year, and it now processes daily transactions that surpass the total transactions of Visa and Mastercard within Brazil. At the beginning of 2025, 'Pix' recorded more than 224 million transactions in a single day.

In e-commerce, 'Pix' captured 42% of online purchases, surpassing credit cards for the first time, with expectations that the gap will continue to widen in the coming years.

American anger

This success of 'Pix' was met with sharp criticism and scrutiny from the US government, which accused Brazil of unfair trade practices because the system bypasses traditional credit networks (Visa and Mastercard) and deprives them of transaction fees. In fact, President Donald Trump's administration went so far as to propose imposing additional 25% tariffs on Brazilian imports as a pressure tool.

Washington also questioned the dual role of the Brazilian Central Bank as operator and regulator of the system, while the bank asserted that it acts as a neutral provider of a public digital infrastructure aimed at increasing market efficiency and financial inclusion.

The US concerns lie in the fact that 'Pix's success could encourage other countries to develop similar local payment systems, and that in the future—if linked to cross-border payment networks—it could reduce reliance on American companies in processing international payments, and perhaps gradually limit the dollar's dominance in some commercial transactions.

Brazilian resilience

Despite US threats, Brazil showed political consensus in protecting its national innovation. President Luiz Inácio Lula da Silva stated that 'Pix is a Brazilian achievement and we will not give it up,' while Senator Flávio Bolsonaro proposed a compromise that prevents 'Pix' from integrating with non-Western cross-border settlement networks to soothe Washington's concerns.

Despite some risks related to fraud and mobile phone theft, Brazilian authorities developed mechanisms to curb financial crimes and imposed restrictions on certain nighttime transfers.

Nevertheless, these loopholes did not prevent 178 million Brazilians from fully relying on a system that redefined the concept of financial sovereignty, and proved that building local alternatives to American financial systems is no longer an impossible idea.

In this new landscape, 'Pix' appears as more than just a payment app; it is a model for a world seeking to redraw the global payments map, even if at the expense of an empire built by Visa and Mastercard over the years.

And the question remains: Will these countries succeed in freeing themselves from American dominance over global financial infrastructure?

Sources: Associated Press – Reuters – International Banker – Financial Times – The Economist – Bloomberg

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