Group 1: Global Payments Landscape - The Trump administration's support for digital assets has led to increased regulatory clarity and institutional engagement in the US crypto market, resulting in stablecoins facilitating over $30 trillion in transaction volume by 2025, primarily reflecting trading and treasury flows rather than consumer payments [1] - US foreign policy and the use of financial sanctions have prompted discussions in the Global South regarding trade settlement diversification and partial dedollarisation [1] Group 2: European Payment Sovereignty - As of 2026, European and UK banks are increasingly concerned about geopolitical and operational risks due to reliance on US-based card networks, with 42% of total European card payments processed by Visa and Mastercard in 2025 [2] - In the UK, Visa and Mastercard dominate the market, accounting for 98% of total card payment value, prompting major banks to discuss alternative solutions following warnings from the Bank of England regarding resilience and concentration risks [3] Group 3: Market Fragmentation in Europe - In the eurozone, Visa and Mastercard processed 47% of card payment value in 2025, with 13 out of 19 countries relying on these providers for at least 96% of their card transaction values, indicating a significant dependency on foreign providers [5] - The combined market share of Visa and Mastercard in the eurozone has doubled since 2010, raising concerns about long-term dependency despite improvements in cross-border acceptance and operational standardization [5] - The UK banks are likely to continue collaborating with Visa and Mastercard for supplementary infrastructure and interoperability measures rather than creating a new national scheme, reflecting the absence of a widely adopted national mobile wallet solution [4]

Core Perspective - The UK is moving towards establishing payment card sovereignty to reduce reliance on US-owned networks like Visa and Mastercard, reflecting a broader trend of payment independence in Europe [3][5][9]. Group 1: Current Landscape - Approximately 95% of UK card transactions are processed through Visa and Mastercard, indicating a high level of centralization and concentration risk in the payment system [3][4][13]. - The UK's National Payments Vision emphasizes the need for infrastructure modernization to enhance resilience and reduce dependency on a few global technology providers [3][4]. Group 2: Domestic Payment Initiatives - UK banks are accelerating plans for a domestic card payments alternative, which has been discussed for years as a government-backed initiative to provide a backup to existing systems [4][12]. - The move towards a dedicated domestic payments rail is significant, as it aims to align incentives, liability frameworks, and technology to build consumer trust and merchant acceptance [17][18]. Group 3: Challenges and Considerations - Open Banking is not yet a complete substitute for card payments, as it lacks the full range of use cases and consumer familiarity associated with traditional cards [14][16]. - Structural challenges exist within the Open Banking sector, including profitability issues and intense competition, which hinder its ability to serve as a core national payments infrastructure [15][16]. Group 4: Strategic Importance - Payments are increasingly recognized as strategic national infrastructure, necessitating coordinated public-private investment and interoperability with European schemes to ensure resilience [12][18]. - The geopolitical landscape has heightened concerns about the UK's exposure to risks associated with reliance on US payment networks, making the development of domestic alternatives more critical [8][9].