British banks plot nationwide funds system to rival Visa and Mastercard amid rising Trump risk

British bank bosses will reportedly meet this week to discuss establishing an alternative to Visa and Mastercard, as fears mount that Donald Trump could turn off the payment systems.

The meeting, chaired by Barclays UK boss Vim Maru, will bring together City figures who will fund a national payments company.

US giants Visa and Mastercard dominate the payment landscape. Most card transactions in the UK are made using payment systems owned by the two companies, according to the Payment Systems Regulator.

While a City-funded and government-backed alternative has been discussed for years, plans have stepped up a notch in the face of Trump’s recent threats against Nato allies.

Should the US President shut off Visa and Mastercard’s payment infrastructure, the disruption could be huge. In Russia, where businesses are reliant on the two companies for 60 per cent of payments, sanctions left ordinary people without access to cash.

The UK is planning a sovereign payments system to rival Visa and Mastercard

‘If Mastercard and Visa were turned off, it would send us back to the 1950s,’ one executive told the Guardian, which first reported the news. ‘Of course, we need a sovereign payments system.’

Visa and Mastercard’s systems are used by Santander, Natwest, Nationwide, Lloyds, Coventry Building Society and the ATM network Link.

European leaders are also looking at locally owned networks that would not be vulnerable to the whims of foreign powers.

Aurore Lalucq, the chair of the European Parliament’s economic and monetary affairs committee, has warned that relying on US companies could prove disastrous.

She said: ‘Visa, Mastercard… the urgent issue is our payment system. Trump can cut everything off.

‘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.’

ECB President Christine Lagarde has also called for Europe to break its dependence on US infrastructure, saying Europe needs its own system ‘urgently’.

Earlier this month, the European Payments Initiative and the EuroPA Alliance signed an agreement to build a pan-European payment network covering 130million users across 13 countries.

The system, built around digital wallet ‘Wero’, will allow Europeans to pay and transfer money across borders.