Finance | UK Banks Plan Domestic Payment System Amid Geopolitical Concerns

UK Banks Initiate Plan for National Payment System

UK bank executives initiated their first meeting on February 16, 2026, to develop a domestic payment system, aiming to reduce the nation's reliance on US-owned networks like Visa and Mastercard. This strategic move is driven by growing concerns over potential geopolitical disruptions and a perceived over-reliance on foreign payment infrastructure, according to recent reports. The initiative, chaired by Barclays' UK chief executive Vim Maru, seeks to enhance the UK's financial resilience and autonomy in payment processing.

For Indian readers, this development highlights a significant global trend where nations are prioritising the sovereignty and resilience of their payment systems. India, with its robust UPI (Unified Payments Interface) system, already has a strong domestic payment infrastructure. However, the UK's concerns serve as a reminder for all economies to continually assess and strengthen their financial systems against potential external pressures and technological dependencies.

Key Details of the Proposed System

The meeting brought together leading UK financial institutions to lay the groundwork for a new, independent payment network. The primary objective is to establish a domestic alternative to dominant US-owned payment networks, specifically Visa and Mastercard. This initiative is a direct response to fears of potential geopolitical disruptions, which have been amplified by concerns surrounding figures like Donald Trump and their potential impact on international financial stability.

A 2025 report by the UK's Payment Systems Regulator (PSR) indicated that approximately 95% of UK card transactions are processed through Visa and Mastercard networks, underscoring the country's current dependence. This dominance has become particularly pertinent as the use of cash in the UK continues to decline.

Official Position and Rationale

The initiative is a collaborative effort, described as 'City-funded, but government-backed,' and has been under discussion for several years. Vim Maru, the UK chief executive of Barclays, is chairing the project, known as 'DeliveryCo,' reflecting the banking sector's commitment to creating a sovereign payment solution. The rationale behind this push is to ensure the UK's economy can continue to function smoothly even if access to existing US-owned payment systems were to be disrupted.

Interestingly, despite the aim to create an alternative, both Visa and Mastercard are reportedly participating in the funders' group, suggesting a collaborative approach rather than a confrontational one. This involvement could help shape the new system and ensure interoperability.

Market and Expert Reaction

Specific market or expert reactions regarding the launch of this initiative were not immediately available at the time of reporting. However, the move signals a broader international trend towards fortifying national financial infrastructures against external vulnerabilities. Similar concerns about reliance on foreign payment systems have been raised in the European Union, with calls for building locally owned networks.

Timeline and What's Next

The meeting on February 16, 2026, marks the initial practical step in a complex process to establish a new domestic payment system. City funders will be responsible for creating the legal structure, leadership plans, and future funding models for DeliveryCo. The Bank of England, meanwhile, is expected to develop infrastructure blueprints that will be handed over to the group next year. It is understood that the new payment system is likely to be operational by 2030.

Separately, the functions of the UK's Payment Systems Regulator (PSR) are in the process of being consolidated into the Financial Conduct Authority (FCA), a move aimed at streamlining regulatory oversight. Primary legislation is required for this restructuring, which is expected to take time.

Context and Background

The increasing interconnectedness of the global financial system, while offering efficiency, also presents potential vulnerabilities. Events such as sanctions against Russia, which led Visa and Mastercard to suspend operations, caused significant disruption for consumers and businesses reliant on card payments in that country. Such precedents underscore the importance for nations to control their critical financial infrastructure.

This initiative aligns with broader efforts by governments and central banks globally to ensure financial stability and sovereignty in an evolving geopolitical landscape. The UK's approach is designed to balance the benefits of global networks with the need for national resilience.