UK banks move to build national alternative to Visa and Mastercard
The initiative aims to ensure the UK economy can continue functioning in the event of disruption to existing card networks
Senior executives from major British banks are set to hold their first meeting on Thursday to advance plans for a national alternative to US-owned payment networks Visa and Mastercard, amid concerns about the United Kingdom's reliance on foreign systems.
The meeting will be chaired by Vim Maru, chief executive of Barclays' UK operations, and will bring together a group of City institutions tasked with financing a new payments company, currently known as DeliveryCo. The initiative aims to ensure the UK economy can continue functioning in the event of disruption to existing card networks, says the Guardian.
Visa and Mastercard currently facilitate around 95% of UK card transactions. One executive involved in the discussions said that if the services were disabled, the UK would be "sent back to the 1950s" when businesses relied entirely on cash.
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The project has been under discussion for several years and is backed by the government, although it is being funded by private-sector institutions. Participants in the funding group include Lloyds Banking Group, NatWest, Santander UK, Nationwide and the ATM network Link. Visa and Mastercard are also part of the group.
The initiative has gained urgency against a backdrop of geopolitical tensions. Some executives have expressed concern that US-owned networks could be disrupted during periods of political strain. European officials have voiced similar worries in recent years, with some calling for a "European Airbus for payment systems" to reduce dependence on foreign providers.
The potential vulnerability of national payment systems has been highlighted in the past. In Russia, US sanctions led Visa and Mastercard to suspend certain services, limiting access to funds for some users.
UK officials have framed the proposed system as a resilience measure rather than a replacement for existing providers. They describe it as providing "extra resilience" and serving as an "additional payment rail" within the financial landscape.
The Bank of England is developing infrastructure blueprints for the proposed system, which are expected to be handed to the funders next year. The new payments system is projected to be operational by 2030.
Visa and Mastercard have said they remain committed to the UK market and welcome competition that fosters innovation and choice.
