Mastercard seeks settlement over $950m losses in Brazil

Mastercard seeks settlement over $950m losses 

The card network has proposed paying around half the outstanding amount claimed by acquirers, while potentially providing additional services, including fraud protection, over several years, according to Bloomberg.

The negotiations follow the January 2026 liquidation of Will Bank, a fintech connected to Banco Master, whose failure has created significant losses across Brazil’s payments ecosystem.

Mastercard and Acquirers Clash Over Liability

Will Bank’s collapse reportedly left Mastercard facing approximately $950 million in payments owed to other participants in its network. Mastercard has already settled roughly half of that exposure, but responsibility for the remaining amount — estimated at around R$2.5 billion ($440 million) — remains disputed.

Mastercard maintains that its obligations extended to payments falling due in the month immediately following Will Bank’s liquidation. Merchant acquirers, however, argue the network should cover the full value of unsettled transactions.

The dispute centres on a fundamental question for card payments: where losses should ultimately fall when an issuing institution fails before merchants receive funds.

Mastercard said it has been working with the liquidator and Brazilian regulator to minimise disruption to the payments ecosystem and is awaiting further funds from the liquidation process.

Dispute Follows Earlier Mastercard Proposal

The latest negotiations follow our reporting in May, when Mastercard was seeking to share the cost of the Will Bank failure with some of Brazil’s largest payment processors.

At that stage, Mastercard had already covered around half the losses and was proposing to recover additional funds before making further payments to acquirers.

The disagreement was complicated by new Central Bank of Brazil rules making payment networks responsible for ensuring transactions are ultimately paid to recipients. Mastercard argued that these requirements should not retrospectively apply to the Will Bank failure because the fintech collapsed in January, before the May deadline for card companies to comply with the new framework.

Banco Master Failure Reverberates Through Payments

Will Bank’s difficulties followed the collapse of parent Banco Master, which was placed into liquidation in November 2025 after months of liquidity pressure.

The subsequent failure of its card-issuing fintech demonstrated how problems at an individual issuer can rapidly spread through the wider acceptance and settlement chain.

For Mastercard and Brazil’s acquirers, the immediate issue is financial. More broadly, however, the dispute could help determine how issuer failure risk is allocated between networks, acquirers and other payments participants as Brazilian regulators strengthen protections around card settlement.