UK Banks Consider Locally Based Payment Network
The UK banking sector is reportedly considering the creation of a home-grown payment network in a bid to reduce the dominance of Visa and Mastercard. According to The Guardian, bank executives are considering funding an initiative that would include bank-issued cards. This comes in response to concerns over the near-monopoly of Visa and Mastercard, which together control 95% of the UK’s noncash payments market. This represents a significant 86% of the total value of all UK payments, as per the country’s payment regulator.
The new initiative is designed to offer an alternative to Visa and Mastercard. However, both card networks are involved in the discussions. Barclays, which is leading the meetings, and Visa have yet to comment. Mastercard, on the other hand, has noted that the meeting is part of an ongoing process that began with the Government’s National Payments Vision published in 2024. The company emphasizes the competitiveness of the payment industry and its commitment to aiding local and global commerce.
Notably, this initiative is not a direct response to any specific policies of US President Donald Trump. However, Trump’s influence on geopolitics and potential threats to international payments, including recent threats to annex Greenland, undoubtedly loom over the proceedings.
Challenges in Establishing a New Payment Network
While the idea of a locally based payment network may sound appealing, there are significant challenges to consider. Notably, Visa and Mastercard already have nearly complete penetration at issuing banks and near universal acceptance at merchants. Overcoming this inertia and achieving a critical mass of issuers and merchants willing to adopt an alternative system would be a herculean task. Moreover, transitioning existing card portfolios to a new system could take years.
Additionally, previous attempts to establish alternatives to Visa and Mastercard in the region have not made significant headway. For example, the bank-backed European Payments Initiative, which pushed for adoption during the COVID-19 pandemic, faces long odds of displacing the dominance of Visa and Mastercard without regulatory intervention.
Winter Olympics Boost Spending in Northern Italy
While these developments unfold in the UK, spending patterns associated with the Winter Olympics are providing a significant economic boost in Northern Italy. According to data from Visa, the influx of international visitors led to a significant increase in spending over the opening weekend of the Milano Cortina 2026 Winter Olympics.
Notably, US cardholders contributed significantly to this spending surge, posting a 125% increase in spending. This was driven partly by a 160% jump in the number of US cardholders visiting Italy. The boost in spending and visits was also noticeable from other countries, with overseas cardholder visits increasing by over 60%.
Such data underlines the significant economic impact that major global events like the Olympics can have on local economies. This positive trend is likely to continue through the duration of the Winter Games, offering a significant boost to local businesses.
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