UK Plans National Payments System

The UK’s largest bank is set to hold a meeting this week, focusing on creating a national payments system to lessen reliance on US networks.

According to a report from the UK Payment Systems Regulator released last year, nearly 95% of card transactions in the UK utilize Mastercard or Visa.

This initiative has been discussed for several years, but recent tensions in transatlantic relations—like President Donald Trump’s controversial threats—have raised fears that Britain’s dependence on American firms might adversely affect the economy.

An executive involved in the discussions remarked that a complete shutdown of Visa or Mastercard would, quite frankly, push the UK back to the 1950s.

Moreover, U.S. sanctions against Russia have further complicated matters, leaving many businesses dependent on these services for about 60% of their transactions, thus restricting everyday access to funds for many people.

Wim Malle, Barclays UK’s chief executive, is expected to lead the meeting, which will include leaders from Lloyds Banking Group, Nationwide, NatWest, Santander, and representatives from British Finance, such as American Express.

The proposed payment system will be city-funded but will also receive government backing, with the Bank of England playing a key role in shaping the infrastructure around this new network. The Treasury introduced concepts for a new generation of retail payment systems last year.

Importantly, Mastercard and Visa are still engaged in this initiative, contributing investment while maintaining their operations in the UK.

The underlying aim appears not just to create an entirely new system, but rather to enhance the existing framework and mitigate potential service disruptions, serving as a defensive measure against any abrupt halting of current services, according to sources close to the situation.

Sarah Breeden, the Bank of England’s Deputy Governor, recently indicated that a domestic-based system could add resilience to the UK payments landscape, acting as an additional layer should the current networks face disruption.

Europe is also reportedly exploring similar strategies to lessen reliance on American corporations. Martina Weimert, CEO of the European Payments Initiative, emphasized the need for “independence” and called for immediate action due to a lack of cross-border solutions.

The goal is to unveil the new payment system by 2030.