The UK Payment Regulator found that up to 95% of all card transactions in the UK use either Mastercard or Visa – both US owned. This percentage becomes all the more relevant as use of cash declines and card transactions increase.
UK banks, The Bank of England and City funders are in talks to create a government-backed UK payment system in place by 2030.
Why now?
Forming a UK transaction payment system has been in discussion for many years between the UK’s leading banks. However, it’s believed that the recent deterioration in relations between the UK and US may be an accelerating factor.
An executive involved in the multi-bank project told The Guardian that if Mastercard or Visa withdrew from the UK economy it would “send the UK back to the 1950s”.
Further benefits?
Deputy governor for the Bank of England, Sarah Breeden said that amid a “challenging and changing cyber and operational risk environment, [a domestic-based system] could provide a degree of extra resilience in the UK payments landscape.”
The new proposal is not about sidelining Visa and Mastercard both are understood to be taking a stake in the project.
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