Nationalism Payment Systems

Goals

To create a point of view and strategy for emerging topics in global payments by researching how nationalism payment systems are affecting large companies (Mastercard and Visa), how these companies are adapting, are companies able to make money during this time, and how is it evolving in different regions of the world (North America, Europe, Latin America, Middle East, and APAC).

Early Findings

  • According to a note from Mastercard to the USTR, Prime Minister Modi of India is supporting the payment service RuPay and creating a "kind of national service." RuPay now accounts for over half of the 1 billion credit/debit card payments in India. Mastercard's note received social media backlash in India.
  • Foreign companies are facing an uphill battle in India with this and many have protested this law because it allows the storage of data locally which drives up the prices for these companies.
  • According to Dr. Ian Gladding of Lewis University, economic nationalism "undermines the tradition of economic liberalism (globalism)" and has a large effect on political/economic cooperation between countries.
  • According to a CNBC article, card companies (such as Mastercard, Visa, and PayPal) will be the champions due the slowing of globalization and the growth of nationalism because of the demand of "electronification and compounding efficiencies." The article expects that some countries will have a combination of domestic payments and global payment operators.
  • The European Payment Council conducted a report in 2019 of payment options and found global payments brands (Visa and Mastercard) will fall to 15% in 2021 from 23% as payment becomes more local.
  • Latin America's e-commerce market is growing, specifically Brazil.
  • CNBC reported the regions of the world with the highest "protectionist" sentiment were the Middle East/North Africa (70%) and Asia Pacific (68%). Trade within regions is on the rise. A few ways companies are trying to combat this is by relocating supply chains to these regions, e-marketing, joint ventures, and using subsidiary companies.

Summary of Initial Research

  • Our initial one-hour research was able to identify some additional points on the issue in addition to what has already been researched.
  • Most of the information pertained to India and China as these two countries seem to be the hotspots for the debate over nationalism payment systems and where companies (Mastercard and Visa) are facing the biggest issues.

Proposed next steps:

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