In recent months, the idea of creating a sovereign UK or European card network has resurfaced in policy circles. The argument is simple enough: reduce dependence on global card schemes such as Visa and Mastercard and regain control over critical financial infrastructure. This move comes as no surprise for top-line analysts, as Europe currently depends on non-EU providers for more than 80% of its digital products and services.

But while the motivation may be understandable, the conclusion is economically irrational. Building a new payment network purely for the sake of as nebulous a term as sovereignty would be an enormously expensive and risky undertaking, and one that will almost certainly fail. It will face significant challenges in order to succeed and even less likely to deliver meaningful benefits to consumers or merchants.

The current discussion lacks grounding in how payments actually work. Payments infrastructure is not something that can simply be replicated on a whim.

Visa and Mastercard did not become the backbone of global commerce overnight. Their networks are the result of more than four decades of sustained investment, technological development, regulatory adaptation, and market building. Behind every simple tap of a card or smartphone sits an extraordinarily complex ecosystem.

These networks provide much more than a technical payment rail. Domestic European schemes were struggling before integration with Visa/Mastercard.

Now, they maintain global acceptance across millions of merchants, manage fraud detection systems capable of operating in real time, support complex multi-currency settlement infrastructure and operate consumer protection frameworks such as chargebacks and dispute management.

Perhaps most importantly, they provide payment guarantees. When a retailer accepts a card payment and hands over goods or services immediately, the merchant does so with confidence that the funds will be received. That guarantee, often taken for granted, is the fundamental tenet that has built trust in global electronic payments, and replicating it is no trivial task. It was foundational to building consumer trust, not just a feature.

The scale of investment required to build a viable card scheme is often underestimated in political discussions.

Visa and Mastercard have spent decades building secure networks, developing fraud prevention technologies, refining payment standards and establishing a global distribution system that allows cards to be issued by banks and accepted by millions of merchants worldwide.

This network extends far beyond the card schemes themselves. It includes processors, acquiring banks, issuing banks, payment technology providers and compliance infrastructure that collectively employ tens of thousands of highly skilled professionals across Europe. This means disrupting European jobs and expertise, making sovereignty arguments self-defeating in employment terms too.

Consumer expectations have evolved alongside this ecosystem. Payments today must be instant, contactless, secure and seamlessly integrated across devices, from smartphones to smartwatches, while remaining resilient against increasingly sophisticated cyber threats.

A brand-new scheme would have to replicate all of this effectively from scratch.

Realistically, such an effort would take at least 10 to 20 years to reach a meaningful scale. During that time it would require enormous capital investment while generating limited efficiencies. For investors, the economics would be extremely challenging and perhaps unviable. For governments, the alternative would be heavy taxpayer support, which tends to be even more inefficient and take even longer.

And even after such investment, success would not be guaranteed. Consumers ultimately choose the payment method that is easiest, safest, and most widely accepted. They are not ideological about payment methods. No amount of political will can override that preference. And competing with established global networks on those terms is a formidable challenge.

The history of European payment systems also provides an important lesson.

Over time, many domestic card schemes across Europe have been integrated with or co-branded alongside Visa and Mastercard. In many cases this was not a loss of sovereignty, but a practical evolution in a global market. Many domestic schemes were actively struggling and facing irrelevance before co-branding saved them.

So, these partnerships extended the life of domestic schemes that were struggling to maintain relevance in an increasingly globalised economy. They enabled international acceptance for European cardholders and created efficiencies for merchants operating across borders. The result is a payment ecosystem that already combines local infrastructure with global interoperability. And unwinding this would mean losing hard-won efficiencies, instead of just failing to gain new ones.

Attempting to unwind this progress in order to create an entirely new system risks discarding decades of practical improvements.

The underlying concern behind calls for a sovereign payment network is not unreasonable. Governments understandably want to ensure that critical financial infrastructure remains resilient in the face of growing geopolitical uncertainty. But sovereignty does not require building a new system from the ground up.

There are far more practical ways to achieve resilience and independence while preserving the efficiencies that existing networks provide.

An initial option would be to formally classify card schemes operating in Europe as critical infrastructure. This would allow regulators to require independent European governance structures capable of prioritising regional stability and continuity, even in the face of international political pressures.

Another possibility would be to revisit the ownership structures that emerged when Europay International and Visa Europe were absorbed into their US counterparts. European banks and investors could explore mechanisms to regain greater influence through joint ownership or strategic participation, while still operating within the established global networks. These alternatives achieve the actual objective of sovereignty without the economic irrationality of reinvention.

These types of approaches would strengthen Europe’s position without disrupting the payment systems that consumers and businesses rely on every day.

Even in the most extreme geopolitical situations, global card networks have shown remarkable adaptability. Russia offers an interesting example. Following the invasion of Ukraine, international operations of Visa and Mastercard in Russia were effectively severed from the global system. Yet within the domestic market, card payments continued to function because the underlying infrastructure remained in place.

Russian-issued cards could still be used within the country, even though they no longer worked abroad.

This points towards an interesting area, that existing payment networks can continue operating locally even when international connectivity is restricted.

In other words, the foundation for sovereign payment functionality already exists within the systems we have today.

The discussion around payment sovereignty, especially by policymakers, often suffers from oversimplification. Payment networks are sometimes portrayed as interchangeable utilities that can be replicated with sufficient political will.

In reality, those who actually operate within these systems know they are complex ecosystems built over decades through continuous investment, innovation and collaboration between private companies, banks, regulators and merchants. Replacing them would not simply be difficult, but more likely economically hugely irrational.

A more productive conversation would focus on strengthening governance, resilience, and strategic influence within the systems that already power global commerce.

Rather than attempting to build a new payment network from scratch, policymakers should ask a different question: how can Europe ensure that the existing infrastructure continues to serve its interests in a changing geopolitical environment?

The answer is far more likely to lie in cooperation, regulatory oversight, and strategic investment than in constructing an entirely new payments ecosystem.

In payments, as in geopolitics, sovereignty is less about standing alone than ensuring you never have to.

Johannes Kolbeinsson, CEO and co-founder at PAYSTRAX

"The future of payments in the UK" was originally created and published by Electronic Payments International, a GlobalData owned brand.

 

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