Could Trump’s Tariffs Trigger A UK Payments Reset? British Banks Discuss Visa And Mastercard alternatives

The UK’s biggest banks are reportedly discussing a potential alternative to Visa and Mastercard, a move that signals growing concern about how exposed Britain may be to geopolitical disruption.

While payments infrastructure has historically been treated as a purely commercial space, it’s increasingly being viewed as something more strategic. And with Donald Trump’s tariffs once again shaking global trade confidence, UK financial leaders appear to be considering whether now is the time for a backup plan.

According to The Guardian, senior figures from major UK banks have been holding talks about building a UK-based card payments system that could reduce the country’s reliance on American payment giants.

Why UK Banks Are Suddenly Talking About “Payment Sovereignty”

The idea isn’t being positioned as an immediate replacement for Visa or Mastercard, but rather as an alternative framework that could give the UK more control over a vital part of its economy. And, of course, less dependence on the US and, by proxy, Trump’s volatility.

This matters because card payments dominate everyday life in Britain. Most people rarely think about what happens behind a contactless tap, but the systems powering those transactions are overwhelmingly controlled by Visa and Mastercard.

According to The Guardian, the two companies process around 95% of card payments in the UK, leaving Britain heavily dependent on infrastructure that ultimately sits outside its control.

Trump’s Tariffs May Not Target Payments, But They Highlight Serious Risk

The renewed focus on financial independence is being linked, at least indirectly, to Trump’s approach to tariffs and trade. According to The Express, UK banking executives have held what was described as an emergency summit amid fears that a more aggressive American trade strategy could create new risks for European economies.

Tariffs aren’t directly aimed at payment systems, but they reinforce how quickly global relationships can shift. For UK policymakers and banking leaders, the concern may be less about tariffs themselves and more about the unpredictability they represent.

In that context, the idea of creating a UK-based payments alternative begins to look less like a niche financial project and more like a resilience strategy. Hope for the best and prepare for the worst.

What Would a UK Alternative To Visa and Mastercard Look Like?

According to The Guardian, the discussions may involve support from regulators and potentially the Bank of England, although the details remain unclear at this point. It’s also not yet clear whether the plan would involve a fully new payments network, a public-private partnership model or something closer to a national infrastructure layer that banks could share.

Whatever form it takes, the message is the same. That is, the UK may be exploring whether payments should be treated more like a utility, rather than leaving the country dependent on private international networks.

This Could Be a Major Opportunity for Fintech Startups

The bigger story for us is what this could unlock for the startup ecosystem. If the UK seriously pursues a domestic payment network, it could create space for fintech companies building payment infrastructure, fraud prevention tools, identity verification systems and merchant-facing solutions.

It could also accelerate innovation in open banking and account-to-account payments, especially if the UK chooses to build something modern rather than simply copying the existing card model.

For startups, a shift in the underlying payments layer could mean new partnerships, new regulation-driven demand and a chance to compete in a market historically dominated by global incumbents.

The Biggest Obstacle? Right Now, Visa and Mastercard Are Everywhere

Of course, building a competing system isn’t going to be easy. Visa and Mastercard are deeply embedded into online checkout flows, retail point-of-sale terminals, banking infrastructure, subscription billing platforms and international commerce.

Replacing that kind of network would likely take years, and it would require coordination across banks, regulators, merchants and consumers. Even then, consumer adoption could be slow unless the alternative offers meaningful benefits such as lower fees, stronger protections or smoother integration with digital wallets.

A Potentially a Big Turning Point

Trump’s tariffs may not be the sole driver behind these discussions, but it does very much seem like they’ve been the trigger that’s starting to force the UK to confront a reality many countries are beginning to recognise. That is, payments are no longer just about convenience, they’re about control. Or, at least, they could be.

If these talks progress, Britain could be moving towards a quiet payments reset that reshapes how money flows across the economy. And in a world where economic power is increasingly tied to technology, that could become one of the UK’s most important infrastructure conversations of the decade.

Our Experts:

• Jonathan Frost: Director of Global Advisory for EMEA at BioCatch
• Robin Anderson: Head of Product at Tribe Payments
• Breno Oliveira: Chief Product Officer at payabl
• Chris Jones: Managing Director at PSE Consulting

Jonathan Frost, Director of Global Advisory for EMEA at BioCatch

“The UK is right to embrace payment card sovereignty, and to understand why, we need only look across the channel. French banks made the right decision by sticking with Carte Bancaire (CB), which provides them with a genuinely dual-rail system.

“Domestic card payments are routed via CB, and international payments are routed via Visa or Mastercard. Crucially, in these uncertain times, it provides France with sovereignty over its payment card infrastructure, greater control over transaction costs, and regulatory leverage for participating banks.

“In the past, the UK had limited sovereignty over its debit card infrastructure, launched in 1988, “Switch” didn’t utilise Visa or Mastercard. Ultimately, however, Switch was folded into Mastercard’s Maestro brand because there was little political focus on maintaining sovereignty, and our banking sector was content to rely on global operators.
That reliance has left the UK more exposed to geopolitical risk, while costs have risen as Visa and Mastercard have increased a range of scheme and cross-border fees in the post-Brexit landscape. The remaining question is whether the UK can realistically rebuild this alone, or whether the more viable long-term solution lies at a European level.”

Robin Anderson, Head of Product at Tribe Payments

“New reports that UK banks are accelerating plans for a domestic card payments alternative – amid concerns about over-reliance on US-owned networks – highlight a broader issue: 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.

“With around 95% of UK card transactions routed through Visa and Mastercard, the system is highly efficient but also highly centralised. But card schemes are only one layer of dependency. Much of the wider financial ecosystem also relies on a very small number of global technology providers across cloud infrastructure and core digital services. Strengthening domestic infrastructure through initiatives such as DeliveryCo isn’t about replacing global partners, which remain fundamental to international commerce. It’s about reducing single points of failure across critical systems and adding optionality into the authorisation, clearing and settlement layers of UK payments.

“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. Sovereignty in payments is less about politics and more about building redundancy that works at scale.”

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Breno Oliveira, Chief Product Officer at payabl

“Visa and Mastercard provide critical infrastructure to businesses and consumers on both sides of the Atlantic – underpinning commerce and cross-border trade on a global scale.

“While geopolitical tensions may have sparked questions about the dependency on these US networks for Europe’s card payments, it is important to recognise that Europe’s push for greater independence around payments pre-dates these more recent issues.

“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. 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.

“New innovation and competition must always be welcomed, but the priority should remain collaboration and interoperability rather than fragmentation. Strengthening Europe’s capabilities while maintaining strong international partnerships will ensure businesses and consumers continue to benefit from greater speed, security and choice in how they pay.”

Chris Jones, Managing Director at PSE Consulting 

“UK banks’ plans to develop a domestic alternative to the global card schemes reflect a growing recognition that payments are strategic national infrastructure, not just a commercial service.

“With roughly 95% of UK card transactions dependent on Visa and Mastercard, the UK has limited room for manoeuvre if those networks were ever disrupted or constrained. History shows that payment systems can be caught up in wider geopolitical or sanctions-related decisions, which makes resilience and optionality essential.

“Open Banking is often cited as the UK’s natural fallback, but it is not yet a like-for-like substitute for cards. While Open Banking payments reached close to 200 million transactions in 2024, that remains a fraction of overall card volumes, and consumer usage, trust and protection mechanisms are still maturing. Initiatives led by Open Banking Limited, alongside recent reimbursement requirements for authorised push payment fraud, are steps forward but they do not yet deliver the familiarity or ubiquity consumers associate with card payments.

“There are also structural challenges on the supply side. Many Open Banking providers continue to struggle with profitability, reflecting low barriers to entry, intense competition and limited commercial incentives. That makes it difficult for the sector, in its current form, to act as core national payments infrastructure at scale.

“Most importantly, Open Banking does not yet cover the full range of use cases cards support – from frictionless in-store payments and cross-border transactions to recurring payments and travel-related pre-authorisations. Without those capabilities, it cannot credibly replace cards in a crisis scenario.

“This is why the move towards a dedicated domestic payments rail, supported by banks and overseen with the involvement of the Bank of England, is so significant. But success will depend on whether the UK can align incentives, liability frameworks and technology in a way that builds consumer trust and merchant acceptance.

“Payments sovereignty will not be achieved through a single solution. It will require coordinated public–private investment, closer interoperability with European schemes, and a clear recognition that payments resilience sits alongside energy, food and data as a matter of national security.”

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