Executives from the country’s banking giants will meet this week on the project, driven by fears that the U.S. could shut off access to American payment systems, The Guardian reported Monday (Feb. 16).
While the initiative—funded by the city of London and backed by the U.K. government—has been talked about for years, President Donald Trump’s recent clash with NATO over Greenland has exacerbated worries, the report added.
Roughly 95% of card transactions in the U.K. are made with Mastercard/Visa-owned systems, the report said, citing data from the country’s Payment Systems Regulator. That dominance has grown much more relevant as the U.K. becomes less dependent on hard currency.
“If Mastercard and Visa were turned off, it would send us back to the 1950s,” an executive familiar with the project told the Guardian. “Of course, we need a sovereign payments system.”
The report pointed to the massive potential for disruption, citing the example of Russia following U.S. sanctions. Those measures cut off access to Visa and Mastercard, leaving consumers without access to funds and unable to purchase goods.
The Guardian also noted that similar concerns have been raised in Europe, where officials are campaigning for their own locally-owned payment network. Last month, chair of the European parliament’s economic and monetary affairs committee, Aurore Lalucq, issued a warning that went viral last month about relying on American companies for such a critical service.
“Visa, Mastercard … the urgent issue is our payment system. Trump can cut everything off,” Lalucq said. “The rest is poetry. I urgently request that the commission organise a European Airbus for payment systems: you can’t say you weren’t warned.”
But the U.K. is taking a less aggressive position, the report added, as Visa and Mastercard are part of the new banking initiative. Other banks and payment companies involved in the project include Santander UK, NatWest, Nationwide, Lloyds Banking Group, the ATM network group Link, and Coventry Building Society.
Meanwhile, Breno Oliveira, chief product officer at payment processing services provider payabl, said Tuesday (Feb. 18) that the issue predates current tensions between the U.S. and Europe.
“The continent has a strong track record of building its own world-class infrastructure, including initiatives like SEPA and, more recently, Wero, a homegrown digital wallet enabling instant account-to-account payments across markets,” he said in a statement provided to PYMNTS. “payabl. is one of the first licensed members and a direct participant in Wero, and we have seen first-hand the appetite for innovative, locally driven solutions that complement existing systems.”
