Senior executives at some of Britain's largest banks have been holding preliminary discussions about establishing a domestic payments network to rival Visa and Mastercard, in what amounts to the most serious challenge yet to the duopoly's grip on British retail finance, The Guardian reported on Sunday.
The talks, which remain at an exploratory stage, have been accelerated by unease in the City over the direction of Washington under Donald Trump — specifically, the fear that the administration's increasingly transactional approach to allies could one day extend to leveraging US-controlled financial infrastructure as a geopolitical instrument. Both Visa and Mastercard are American companies, incorporated in Delaware, and subject to US law. That jurisdictional reality, once treated as a theoretical footnote in risk registers, has acquired a sharper edge since January 2025.
According to The Guardian, lenders including Barclays, Lloyds, NatWest and HSBC are among the institutions whose representatives have been involved in the preliminary conversations, alongside Pay.UK, the operator of the Faster Payments scheme. The discussions have reportedly touched on whether the existing Faster Payments rails could be expanded to support card-like functionality at the point of sale — an architecture that would, in effect, allow British banks to route retail transactions without touching the American card networks.
<h2>Not a New Idea, But a New Urgency</h2>
The concept of payment sovereignty is hardly novel in European financial policy circles. The European Payments Initiative (EPI) was launched in 2020 with backing from a consortium of European banks and the explicit blessing of the European Central Bank, with the intention of creating a pan-European card scheme to reduce dependence on Visa, Mastercard, and — particularly — American data flows. Germany's Wero wallet, developed under the EPI umbrella, launched to consumers in 2024. Meanwhile, the ECB's TARGET Instant Payment Settlement (TIPS) system provides the underlying plumbing for euro-zone instant payments without American involvement.
Britain, having left the European Union, is not party to the EPI — a gap that now looks rather less like regulatory freedom and rather more like strategic exposure. The irony will not be lost on those who argued, rather loudly, during the Brexit debate that national control over financial infrastructure was one of the prizes of sovereignty.
This story is not, however, a Brexit vindication narrative. The pressure driving these discussions is not a post-Brexit design choice but a response to the perception of US political risk — a risk that would be equally acute for Paris, Berlin or Amsterdam were it not for the EPI's partial progress. The distinction matters: Britain is reacting to an external threat, not executing a long-planned strategy.
<h2>The Sovereignty Argument</h2>
The language of financial sovereignty is increasingly mainstream across governments of all political persuasions. The EU's new SAFE (Savings and Investments Union) programme, announced in early 2026, contains explicit provisions for deepening European capital market independence, and EU officials have privately acknowledged that payment infrastructure is part of the same conversation. A senior official at the European Commission told reporters last month that "the question of who controls the pipes is as important as the question of who controls the data."
In Westminster, the Keir Starmer government has thus far said little publicly about the banking discussions. Treasury sources declined to comment when approached by The Guardian, though officials are understood to be monitoring the talks with interest rather than alarm. The Bank of England's Prudential Regulation Authority is separately conducting a review of operational resilience in payment systems — a review whose scope, sources said, extends to concentration risk in card network infrastructure.
<h2>The Commercial Obstacles</h2>
Any British alternative to Visa and Mastercard would face formidable commercial obstacles that the more optimistic participants in these discussions are perhaps underplaying. Both networks have invested decades and billions of dollars in fraud detection, merchant acceptance infrastructure, and cross-border settlement. A domestic scheme would need to replicate those capabilities — or, more realistically, confine itself to the domestic market whilst leaving international transactions on the existing rails.
There is also the question of merchant buy-in. British retailers, still absorbing the post-pandemic shift to contactless payments, have limited appetite for another infrastructure transition unless the economics are compelling. The banks themselves have mixed incentives: they collect interchange fees from card transactions, and any new domestic scheme would need to redistribute those economics in a way that keeps lenders financially committed to its success.
As they say in Westminster, "the constitution is what happens" — and what tends to happen with ambitious financial infrastructure projects is that they take considerably longer than their proponents promise, cost considerably more, and arrive in a world that has moved on. The EPI itself has been in development for six years and has yet to achieve meaningful scale outside Germany and France.
Still, the fact that these conversations are happening at all — and that they are happening with greater seriousness than at any previous moment — is itself a signal worth reading. The City of London, for all its post-Brexit anxieties, has never been short of institutional memory. And that memory now contains a very clear lesson: infrastructure dependencies, once taken for granted, have a habit of becoming leverage in other people's hands.
