UK Banks Initiate Talks for National Payment Network Amid US Reliance Concerns
UK bank executives are convening their inaugural meeting to develop a domestic alternative to Visa and Mastercard, driven by escalating apprehensions regarding dependency on US-controlled payment infrastructures. The gathering, scheduled for this Thursday, will be chaired by Vim Maru, the UK chief executive of Barclays, and will assemble a consortium of City funders tasked with financing the establishment of a new payments company. This initiative aims to safeguard the UK economy against potential operational failures in existing networks.
Background and Motivations for a Sovereign Payments System
The City-funded, government-supported project has been under deliberation for several years. However, recent geopolitical tensions, including threats from former US President Donald Trump towards NATO allies, have intensified worries that over-reliance on American corporations could jeopardise UK payment flows and broader economic stability. According to a 2025 report by the UK's Payment Systems Regulator, approximately 95% of card transactions in the UK are processed through systems owned by Mastercard and Visa. This dominance has become increasingly critical as cash usage continues to decline nationwide.
An executive involved in the project highlighted the urgency, stating, "If Mastercard and Visa were turned off, it would send us back to the 1950s," referencing an era before card dominance when businesses relied entirely on cash. "Of course, we need a sovereign payments system."
Global Context and European Parallels
The potential for disruption is substantial, as evidenced by experiences in Russia, where US sanctions forced Visa and Mastercard to suspend services, affecting 60% of payments and leaving citizens without access to funds. Similar concerns are emerging in the European Union, where politicians advocate for locally owned networks to prevent arbitrary shutdowns by foreign entities. Aurore Lalucq, chair of the European Parliament's economic and monetary affairs committee, recently issued a viral warning, emphasising, "Visa, Mastercard ... the urgent issue is our payment system. Trump can cut everything off."
In contrast, the UK is adopting a more collaborative approach, with Visa and Mastercard participating in the initiative as part of the funders group. This consortium includes major banks and payment firms such as Santander UK, NatWest, Nationwide, Lloyds Banking Group, Link, and Coventry Building Society, ensuring these companies have a stake and voice in the new system.
Official Stance and Strategic Development
UK officials have underscored the necessity for a backup system without explicitly citing US threats as the primary concern. Sarah Breeden, deputy governor of the Bank of England, remarked in a recent speech that the new network could enhance resilience in the UK payments landscape, particularly in the face of cyber and operational risks. Joe Garner, former Nationwide chief executive and government adviser, added, "Regardless of any political developments, the UK needs to do this. We needed to before, we need to now ... I don't think that's changed by recent events."
The City funders will oversee the legal framework, leadership strategies, and funding models for the new entity, known as DeliveryCo. Concurrently, the Bank of England will design infrastructure blueprints to be transferred to the group next year, with the system expected to be operational by 2030.
Industry Responses and Future Outlook
Both Visa and Mastercard have expressed commitment to the UK market and welcomed competition. Visa emphasised its dedication to providing secure, innovative digital payments with high resilience, while Mastercard reiterated its long-term investment in the UK, supporting business growth and customer needs. UK Finance, the trade association assisting the DeliveryCo project, declined to comment, as did the Treasury and Bank of England when contacted.
This move represents a strategic effort to bolster national financial security, reduce vulnerability to external disruptions, and foster innovation in the payments sector, ensuring the UK maintains control over its economic infrastructure in an increasingly digital world.
