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Growing geopolitical tensions are forcing countries to reassess their critical national infrastructure, with growing political focus on the sovereignty of domestic payment rails.
In 2023 alone, the global payments industry processed 3.4trn transactions valued at $1.8qrn.
Heightened geopolitical friction is forcing nations to rethink how exposed they are to financial systems beyond their control. As these tensions rise, governments are increasingly concerned about the sovereignty of their payment rails.
The war in Ukraine and the sanctions placed on Russia demonstrated how access to global payment networks can be restricted almost overnight.
At the same time, the leadership role of the US in the global order is becoming less predictable, which has prompted some jurisdictions to reassess their dependence on financial infrastructure anchored in the country.
Many economies are accelerating efforts to reduce reliance on foreign-controlled payment rails. The topic of infrastructure sovereignty was a recurring theme of City & Financial Global’s Payments Regulation and Innovation Summit 2026, held earlier this month in London.
In her keynote address, Sarah Breeden, the Bank of England’s (BoE) deputy governor for financial stability, positioned the next generation infrastructure of the UK’s payment rails as an “alternative to cards”, a nod towards the American dominated card industry.
Similarly, Megan Coulson, UK public policy lead at TrueLayer, noted that although pay by bank has been touted as a move towards payments sovereignty, UK’s current retail rails are provided by VocaLink, a Mastercard subsidiary since its acquisition in 2016.
During a panel discussion, she likewise pointed out how cloud nativity is affecting sovereignty, with increasing amounts of sensitive infrastructure held in data centres abroad.
The tone of the conference reflected concerns raised elsewhere in the world. European policymakers have become increasingly vocal about the strategic risks posed by reliance on foreign-controlled payments infrastructure.
Many commentators have emphasised that Europe’s heavy dependence on non-EU card schemes and payment networks undermines the sovereignty and resilience of the continent’s financial system.
Comparative case studies
Around the world, governments are reassessing who ultimately controls the systems that move money within their borders.
In the UK, VocaLink (the company that operates Faster Payments, Bacs and LINK) processes the vast majority of UK salaries, household bills and state benefits.
Although VocaLink is regulated and supervised by the Bank of England (BoE) as a financial markets infrastructure (FMI) firm, as noted, it is a subsidiary of US payments giant Mastercard.
VocaLink's board and executive leadership are accountable to Mastercard’s corporate governance framework. The reality that this critical piece of national payments infrastructure sits on the balance sheet of a foreign corporation is a growing concern that UK policymakers must face.
Commercial priorities can at times diverge from national policy imperatives, concerns underscored in 2025 when the BoE fined VocaLink £11.9 million for governance and risk management failings. This was its first regulatory enforcement action against a financial market infrastructure provider.
The financial penalty levied by the BoE highlights the greater regulatory scrutiny of core infrastructure. Moreover, the push towards alternative forms of payment such as account-to-account (A2A) reflects broader reluctance to have concentration risks within the payments systems, encouraging consumers to consider other forms of payments beyond cards.
Data from the European Central Bank (ECB) shows that in 2022, roughly two-thirds of all card payments across the eurozone were processed by Visa and Mastercard.
In addition, 13 EU member states have no homegrown card network, meaning everyday consumer transactions depend almost entirely on payment systems headquartered outside the bloc.
The rise of online shopping, mobile wallets and cross-border spending has further favoured global networks, gradually eroding the relevance of domestic alternatives and reinforcing Europe’s reliance on foreign-owned payments infrastructure.
In late 2025, the Council of the European Union explicitly linked the development of a digital euro to strengthening the resilience and strategic autonomy of the EU’s payment infrastructure, framing it as a way to safeguard essential payment services from external geopolitical pressures.
The EU is also actively encouraging private sector initiatives such as the European Payments Initiative (EPI) aimed at creating pan-European payment solutions.
The EPI, consisting of 16 banks and financial service companies, introduced Wero in 2024 as a European competitor to Apple Pay. This digital payment platform currently reports more than 43m users across Belgium, France and Germany, with plans to extend its services to online and in-store transactions.
India's Unified Payments Interface (UPI) exemplifies how emerging economies can maintain payment sovereignty while fostering innovation.
Launched in 2016 by the National Payments Corporation of India (NPCI), a consortium of Indian banks, UPI operates under the direct oversight of the Reserve Bank of India.
The system's governance structure ensures that critical payment infrastructure remains under domestic control, with local banks and fintech companies acting as payment service providers (PSPs). Furthermore, the UPI system has been built on the existing Immediate Payment Service (IMPS) infrastructure, which is also domestically owned and run.
Brazil's Pix system follows a similar philosophy of payment sovereignty, having been developed and launched by the Brazilian Central Bank (BCB) in 2020. Brazil built Pix as a fully domestic instant payment infrastructure, with the central bank maintaining direct governance and operational oversight.
The system requires all financial institutions operating in Brazil with more than 500,000 customer accounts to participate, ensuring widespread adoption while keeping control firmly in Brazilian hands. Pix’s governance model mandates that all payment data and infrastructure remain under Brazilian jurisdiction, subject to local regulations and central bank supervision.
This approach has enabled Brazil to achieve remarkable adoption rates, scaling to more than 150m users within three years, while ensuring that the economic benefits, data, and strategic control of the payment system stay within the country rather than being outsourced to international technology companies.
Looking forward
There is a growing recognition from policymakers globally that payment rails are not just technical plumbing for the economy, but strategic assets. What was once seen as purely a matter of efficiency is now viewed through the lens of national security, economic resilience and geopolitical influence.
Rome was not built in a day, and neither will payment sovereignty be achieved overnight. It may be that developed economies such as the EU and UK, which have grown increasingly concerned about their dependence on foreign payment infrastructure, will seek to adopt strategies pioneered by emerging economies such as India and Brazil.
These nations have demonstrated that building sovereign payment systems requires early action, strategic foresight and unwavering commitment to domestic control.
Policymakers are considering strategies such as building domestic card schemes, forming regional settlement alliances, localisation of sensitive data and exploring central bank digital currencies (CBDCs) to ensure continuity if networks become politicised or fragmented.
PSPs and merchants alike should monitor the regulatory landscape closely to recognise how increasing choice in payment channels may impact their demand flows, with greater regulatory scrutiny on concentration risks and outsourcing likely to mean operation changes and increased compliance costs.
