There’s a very good chance that in the corner of every bank and credit card in your wallet is one of two logos: Visa or Mastercard.
The two American financial services giants offer payment processors, which connect a bank to a merchant whenever a purchase is made.
Banking bosses are meeting on Thursday to discuss offering people in the UK a national alternative to Visa and Mastercard.
The new payment network, being created by the industry-led body DeliveryCo, could be in place by 2030.
One executive familiar with the project told The Guardian: ‘If Mastercard and Visa were turned off, it would send us back to the 1950s.
‘Of course, we need a sovereign payments system.’
After all, 95% of every transaction in the UK is made using payment systems owned by Mastercard and Visa.
What would a Visa or Mastercard alternative look like? And how would it impact your money? Metro spoke with financial experts to find out.
One disruption ‘could affect a huge number of transactions’
The key thing is that it will make the money in your bank account safer, Chris Jones, managing director at PSE Consulting.
Take Russia. When the White House forced Visa and Mastercard to suspend their services over the Kremlin’s invasion of Ukraine, this left Russians unable to pay for things or access their money.
Russian shops and ATMs couldn’t accept cards that were issued abroad either.
Jones says: ‘Most of us rely on Visa and Mastercard for everyday payments, whether it’s buying a coffee, shopping online, or booking travel.
‘That means if these networks ever faced a major disruption, it could affect a huge number of daily transactions.
‘Banks are looking at creating a UK-based alternative to make sure payments can keep running smoothly, even if something happens to the global schemes.’
In other words, he adds, having a British payment processor is like a ‘backup generator’ for the public’s money.
Jones adds: ‘Most of the time you don’t notice it, but it’s vital if things go wrong.’
Marty Bauer, a senior ecommerce expert at Omnisend, says there would be a few things shoppers notice, however.
‘The first change most people may notice is simply more choice at online checkouts, for example more pay direct from bank options sitting alongside cards, rather than a hard replacement of cards,’ Bauer says.
‘For retailers, though, it is a bigger operational lift. Adding new payment types is not just a button on a checkout. It means updates to the customer journey, fraud and risk rules and customer service processes.
‘Most businesses will also have to run these new options alongside established networks while managing fees and complexity.
‘These fees can be costly, which is why a lot of independent retailers cannot afford the likes of American Express, which typically tends to charge more. ‘
Visa was founded in 1958, while Mastercard was formed less than a decade later.
It takes time for a money transfer system to become as established as the two firms are, says Johannes Kolbeinsson, CEO and co-founder of payment processor PAYSTRAX.
‘To create a new UK-wide payment system with the same usability, technology, trust and adoption is completely unrealistic and will take decades at least,’ he says.
‘Even then, whoever this new competitor is will always be lagging considerably behind the two.’
Wait, what is DeliveryCo?
Neither the meeting nor DeliveryCo is anything new, being part of a years-long government initiative to build new payment infrastructure.
DeliveryCo, also called the Delivery Company, is a body that is figuring out the best ways to revamp how British people pay for things.
Visa, Mastercard, as well as most major banks and ATM networks are involved in the group, with a preliminary meeting being held on Thursday.
Mastercard stressed to Metro that the meeting has been ‘misrepresented’ by the press.
A spokesperson added: ‘The meeting this week is part of the longstanding and orderly process that was kick-started with the publication of the Government’s National Payments Vision in 2024.
‘Both the meeting itself and its timing sit squarely within this longstanding and orderly programme. Any suggestion to the contrary is simply incorrect.’
They added that the company remains ‘committed’ to investing in the UK.
A Visa spokesperson told Metro that the company remains committed to providing UK consumers and businesses ‘with access to innovative, secure digital payments with the highest levels of resilience and reliability’.
They added: ‘We welcome the industry progress on account-to-account payments in the UK.
‘We believe competition between multiple solutions, supported by a level playing field, will deliver choice, innovation and economic growth in the UK.’
Get in touch with our news team by emailing us at webnews@metro.co.uk.
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