Europe Is Routing Payments Around Visa and Mastercard. Africa Just Gave Them a 45 Percent Bigger Network to Route Through.

What Europe Has Built and Why It Matters Europe's structural shift is not a technology story. It is the consequence of a deliberate regulatory decision that the value extracted by external payment intermediaries from European commerce had grown large enough to warrant the institutional cost of building an alternative. PSD2, the European Commission's revised Payment Services Directive implemented from 2018, forced banks across the European Union to open their payment systems through standardised APIs, allowing third parties to initiate payment directly from customer bank accounts without routing through card networks. SEPA Instant, the real-time payment infrastructure that processes transfers between European banks in seconds, provided the settlement layer that made those direct payments commercially viable. The result is that when a consumer in Germany pays a German merchant through a "Pay by Bank" button, the transaction moves directly from one bank account to another, settling in near real-time, with no Visa or Mastercard node in the transaction chain. In 2023, Europe processed over EUR 1 trillion in instant payments through SEPA infrastructure. The financial implication is specific: interchange fees that card networks charge on European transactions, capped at 0.2 percent for consumer debit and 0.3 percent for consumer credit under EU regulation, were not earned on those transactions. Applied at scale across EUR 1 trillion, those fractions of a percentage point represent billions of euros annually that did not flow to payment networks headquartered in Purchase, New York and San Francisco. Europe is not conducting an experiment in payment sovereignty. It is executing a deliberate structural repatriation of the value that its own commercial activity generates. The direction of travel is not ambiguous. Europe's open banking framework, its real-time payment infrastructure, and its regulatory mandate for bank interoperability are converging into a system where card networks are progressively optional for domestic and intra-European transactions. Visa and Mastercard remain relevant for cross-border transactions with non-European markets, for fraud liability frameworks, and for the global acceptance networks that European consumers use when travelling. But within Europe's own economy, the routing layer is changing. What Africa Is Building Instead Mastercard has grown its acceptance network across Africa by 45 percent in 2025, a major milestone that brings millions more consumers and small businesses into the continent's fast-expanding digital economy. The surge comes in a year defined by new market entries, significant investment, product innovation, and an expanded on-ground presence, efforts that reinforce Mastercard's role in powering Africa's projected USD 1.5 trillion digital payments market by 2030. A 45 percent expansion in acceptance network in a single year is not incremental growth. It is infrastructure installation at the pace that creates the network effects that make switching costs prohibitive. Every merchant terminal, every QR code deployment, every bank integration, and every mobile money partnership that Mastercard installs in 2025 is a node in a network whose value increases with each additional node and whose removal becomes progressively more costly as adoption scales. In Nigeria, Mastercard-backed collaborations with financial institutions have enabled QR-based payment solutions that support over 1.8 million SMEs and gig workers, while dollar-denominated card solutions are helping more than 50,000 businesses engage in international trade. Similar initiatives have been rolled out across Kenya, Tanzania, and Mauritius, collectively supporting over 200,000 SMEs. The Tanzania dimension is specific and directly relevant to the Uchumi360 coverage region. Mastercard's partnerships with NMB and other Tanzanian banks, framed around SME empowerment and digital financial inclusion, are simultaneously the infrastructure through which Tanzanian SME transactions will route through an American payment network for the foreseeable future. The framing of these partnerships as financial inclusion initiatives is not dishonest. They do extend digital payment access. But financial inclusion through Visa and Mastercard infrastructure and financial inclusion through African-owned infrastructure are not the same economic outcome, even when the consumer experience is identical. Visa and Mastercard have directly and indirectly invested around USD 700 million into Africa's payment industry. Their most significant partnerships have been with the bigger telecom companies on the continent. Mastercard agreed to buy a 3.8 percent stake in the mobile money business of MTN, Africa's largest telecom, for USD 200 million. In 2021, the company had bought a similar stake in the mobile money operations of Airtel Africa for USD 100 million. In 2022, Visa said it had started integrating its global virtual card network with Safaricom's M-Pesa. These stakes require careful analytical reading. Mastercard's USD 200 million stake in MTN Group Fintech is not simply an investment. It is a structural integration of the world's largest card network into the payment infrastructure that serves MTN's 270 million customers across 19 African countries. When MTN Mobile Money customers transact, Mastercard's network infrastructure is now embedded in the rails that carry those transactions. The same logic applies to the Airtel Africa stake and the Visa-M-Pesa integration. Africa's mobile money platforms, which were built as genuinely indigenous financial infrastructure serving populations that the traditional banking system did not reach, are being progressively woven into global card network architectures through equity stakes and technical integrations that their founders did not design them to serve. The USD 1.5 Trillion Projection and Who Benefits From It Africa's digital payments economy is set to grow to USD 1.5 trillion by 2030, according to a Mastercard-commissioned report by Genesis Analytics. The source of this projection deserves explicit acknowledgement. A report commissioned by Mastercard projecting a USD 1.5 trillion African digital payments market by 2030 is a commercial document produced by a company whose revenue depends on processing transactions in that market. Its accuracy as a projection is separate from its function as a market positioning statement. Mastercard is telling investors, African governments, development finance institutions, and potential partners that Africa's payment market is going to be enormous, and that Mastercard is the infrastructure through which that enormous market will flow. The projection may be correct. The entity making it has a direct commercial interest in its being believed. The economic question that the projection raises is not whether Africa's digital payments economy will reach USD 1.5 trillion. It is who will capture the economic value that flows through it. At a conservative average fee of 1 percent on transactions routed through external card networks, a USD 1.5 trillion annual market generates USD 15 billion in annual payment processing revenue. At 2 percent, it generates USD 30 billion. The difference between those fees flowing through African-owned payment infrastructure and flowing through infrastructure headquartered in New York and San Francisco is the difference between African digital commerce funding African financial sector development and African digital commerce funding American shareholder returns. PAPSS and PAPSSCARD: The Alternative That Is Not Scaling at Comparable Speed The honest accounting of what Africa has built as an alternative requires stating both what it is and how far it is from the scale at which it could compete with the infrastructure Mastercard and Visa are installing. PAPSS, the Pan-African Payment and Settlement System launched formally in January 2022, is a genuine and technically sound cross-border payment infrastructure that connects African central bank RTGS systems and enables intra-African settlement in local currencies without routing through external correspondent banks. In May 2024, PAPSS CEO Mike Ogbalu III reported that more than 115 commercial banks had connected, with the same number again in the pipeline. PAPSS has expanded to 16 countries with 15 financial institutions and 14 national switches connected. One hundred and fifteen commercial banks connected to PAPSS across 16 African countries is real infrastructure. It is also infrastructure that serves a fraction of the commercial activity that Mastercard's 45 percent acceptance network expansion in a single year has reached. Mastercard's partnership with MTN alone gives it access to 270 million customers across 19 countries. PAPSS's 16-country coverage includes central bank connectivity that is institutionally significant but commercially thin relative to the merchant acceptance and consumer usage that constitute a functioning payment network. PAPSSCARD, launched in June 2025 as Africa's first Pan-African card scheme, is the most direct competitive response to Visa and Mastercard's African expansion. Its symbolic significance is genuine: a card scheme built by Africa, for Africa, settling through PAPSS infrastructure in local currencies without routing through American card networks, is exactly the architectural alternative that payment sovereignty requires. Its commercial status at launch, pilot issuance through Bank of Kigali and I&M Bank Rwanda with acceptance in Nigeria, is a proof of concept rather than a network. A card that is issued in Rwanda and accepted in Nigeria is meaningful. A card that is issued in all 54 African countries and accepted everywhere on the continent is a network. The distance between those two states is years of institutional coordination, commercial bank adoption, merchant terminal installation, and consumer behaviour change that Mastercard's USD 200 million MTN stake and 45 percent acceptance network expansion in a single year has already begun to foreclose. The Strategic Logic of the External Investment It would be analytically incomplete to describe Visa and Mastercard's African expansion as simply extractive. Their investment in the continent's payment infrastructure is generating genuine financial inclusion, reaching populations that were previously entirely outside the formal financial system, and building the merchant acceptance networks that small businesses need to participate in digital commerce. The partnership with M-Pesa has enabled millions of people who had mobile money accounts to access international digital commerce platforms that required card credentials. The SME tools deployed through Tanzanian and Kenyan bank partnerships are enabling small businesses to collect digital payments in ways they could not before. The analytical question is not whether Visa and Mastercard's investment is beneficial at the individual transaction level. It is whether the architectural consequence of that investment at scale serves Africa's long-term economic interests. The goal for both Visa and Mastercard is simple: enmesh themselves in every nook and cranny of the massive, disparate digital payments ecosystem emerging across the massive continent. They make money when there is a transaction made with the card, so their ambition is to get more and more people in Africa to use their own cards. That ambition is stated explicitly and it is the rational commercial strategy for a payment network. It is also the mirror image of Africa's strategic interest, which is to build payment infrastructure whose fee economics stay within the African financial system and whose data sovereignty remains under African institutional control. These two interests are not necessarily irreconcilable at the individual transaction level and they are structurally irreconcilable at the system level. A USD 1.5 trillion African digital payments market whose infrastructure is primarily owned, operated, and monetised by American card networks is not the same economic outcome as a USD 1.5 trillion market whose infrastructure is primarily African. The Window That Is Closing Europe reached the point where it could build a regulatory mandate for bank-to-bank payment because its financial system was mature enough, its regulatory institutions were powerful enough, and its political economy was willing to absorb the commercial friction of forcing interoperability on incumbent networks. It could do this because the card networks had not yet achieved the level of lock-in in European domestic commerce that would have made mandating alternatives politically unworkable. Africa is in the window before that lock-in becomes permanent in its domestic markets. Mobile money's dominance in East Africa and the persistence of cash in West and Central Africa mean that card acceptance infrastructure, though expanding rapidly, has not yet reached the saturation level at which displacing it becomes commercially irrational for merchants and institutionally complex for regulators. The 45 percent expansion in 2025 is the beginning of the acceleration that could close that window within the decade. The institutional response required to keep the window open is not ideological opposition to Visa and Mastercard's participation in African markets. It is the construction of African payment infrastructure at a speed and scale that can compete for the merchant acceptance, the bank integration, and the consumer adoption that determine which system becomes the default architecture. PAPSSCARD must move from pilot issuance in Rwanda to continental acceptance faster than Mastercard's acceptance network expansion installs the lock-in that makes alternatives commercially marginal. That race is currently not close. Mastercard expanded its African acceptance network by 45 percent in 2025 while PAPSSCARD issued its first commemorative cards in Abuja. Both developments happened in the same year. The distance between them is the measure of the architectural gap that Africa must close if it intends to build the payment infrastructure whose economics serve African development rather than American shareholder returns. The Bottom Line Europe spent decades embedding Visa and Mastercard into its commercial infrastructure and is now paying the regulatory and institutional cost of building the alternative at scale. Africa is being offered the choice of whether to repeat that process or to build the alternative first. It is currently doing neither cleanly. It is expanding Visa and Mastercard's African networks at record pace while simultaneously building indigenous infrastructure that is real, institutional, and commercially thin relative to the competition it faces. The USD 1.5 trillion projection is real. The question of who will process that USD 1.5 trillion, and where the fee economics of processing it will flow, is the question that is being decided right now through investment decisions, bank partnerships, regulatory frameworks, and architectural choices that will be very difficult to reverse once the network effects of the dominant system become entrenched. Europe chose to build the alternative after the lock-in. Africa still has the opportunity to build it before. Whether it takes that opportunity, or whether it continues embedding the external routing layer at 45 percent annual expansion rates while the indigenous alternative issues commemorative cards, is the payment sovereignty question of the next decade.