Major banks in the UK have come together to explore the creation of a national payments network designed to lessen their reliance on Visa and Mastercard.

In light of this [announcement], leading banks in the UK are engaged in discussions aimed at developing an internal payment system. The project, which enjoys support from both the government and the Bank of England, involves executives from Barclays, Lloyds Banking Group, Nationwide, NatWest, and Santander among others, with a scheduled meeting for this week to advance its progress.

This initiative arises amidst growing concerns about UK payments being heavily concentrated on two American-owned networks. According to the latest report from the UK Payment Systems Regulator, nearly 95% of card transactions in the UK currently rely on Visa or Mastercard systems. The meeting will be chaired by Barclays’ chief executive officer and will have UK Finance participating.

Operational Resilience as a Priority

While the project scale is significant, insiders suggest that the plans might center more on enhancing and complementing existing infrastructure rather than building an entirely new system from scratch. The core focus is on operational resilience — aiming to reduce risks of payment flow disruptions — instead of a direct response to US geopolitical leverage.

In an exclusive comment for The Paypers, Robin Anderson, Head of Product at Tribe Payments, noted that New reports about UK banks accelerating plans for a domestic card payment alternative – amid concerns over over-reliance on US-owned networks – highlight broader issues: concentration risk. The renewed focus on resilience also reflects the ambitions set out in the UK’s National Payments Vision, which has placed infrastructure modernisation firmly on the agenda. He further stated that With around 95% of UK card transactions routed through Visa and Mastercard, the system is highly efficient but also highly centralised. The real test will be execution. Any new payment rail must integrate seamlessly with existing card and account-to-account ecosystems, make commercial sense for issuers and acquirers, and avoid introducing additional cost or complexity.

The Bank of England has articulated the rationale behind this initiative. The deputy governor recently highlighted that a domestically based system could offer additional resilience during rare instances of operational disruption to existing rails, citing the challenging and changing cyber and operational risk environment. Additionally, the Treasury presented plans for new retail payments infrastructure last year.

It is worth noting that Visa and Mastercard are not being excluded from this project. Both networks have reportedly invested in it and remain committed to their presence in the UK market, indicating that the outcome is likely to be a supplementary rail rather than a direct competitive replacement.

Geopolitical Context and European Comparisons

The UK is not alone in reevaluating its payments sovereignty. Across Europe, initiatives like the European Payments Initiative are urging urgent actions towards greater cross-border payment independence. The CEO of the European Payments Initiative has stated that independence is so crucial given limited domestic alternatives to US card networks.

The new UK network is anticipated to be operational by 2030, with funding sourced from the financial sector and involving the Bank of England in infrastructure development.