Visa and Mastercard Just Did Something Unexpected With the UK's New Payment System

Emily Jones · 2026-09-15

When the UK first floated plans for a payments network built for the digital economy, the obvious question was whether it could take on Mastercard and Visa. For years, those two companies have dominated the country's card market so completely that challenging them seemed almost pointless. But here's where the story gets interesting. The effort has actually pulled in Britain's biggest banks and major U.S. lenders like Citi and JPMorgan Chase. And get this — even Visa and Mastercard themselves have participated in laying the groundwork for the new payment rail. That's not what most people expected. The newly formed UK Payments Delivery Company (PDC) is now looking to raise roughly $63 million (about £50 million). That money should fund the new entity through its incorporation and mobilization stages over the next two years. ### What's Really Driving This? Ben Danner, Senior Debit Analyst at Javelin Strategy & Research, put it plainly: "It's about modernizing payments infrastructure more than it is a play on financial sovereignty. With the card networks and several prominent banks taking an active role in its development, it's not simply about finding alternatives to U.S. organizations but expanding use cases for open banking, pay by bank, commercial payments, and preparing for the future of payments." So this isn't just about giving Visa and Mastercard a black eye. It's about building something that works better for everyone — including the companies that currently run the show. ### A Landmark Strategy Payment modernization has become a top priority for UK regulators in recent years. The PDC represents a landmark in Britain's broader financial services strategy. Earlier efforts included the Bank of England extending operating hours for UK payment systems to support faster payments. The UK government has also spotlighted digital assets technologies as a potential driver for payments modernization. They've even considered a mandate that would require the Bank of England to support innovation in payment systems and digital currencies. ### A Significant Obstacle Many of these objectives were first set forth in the UK's National Payments Vision paper two years ago, including the creation of the PDC. Known as DeliveryCo in its early stages, the PDC was initially viewed as part of the broader global trend toward payments sovereignty. However, like many efforts in other regions, the PDC is still years away from widescale implementation. Meanwhile, Visa and Mastercard currently handle roughly 95% of all card transactions in the UK. These cards power most of the mobile wallet transactions that have become a mainstay for UK shoppers. That's a massive obstacle for any new system. But here's the thing — there will likely still be many use cases for the PDC once it goes live. Think about it this way: just because something dominates today doesn't mean it will dominate forever. The payments world is changing fast, and the UK wants to be ready for whatever comes next. ### What This Means for Businesses If you run a business that accepts payments — and let's face it, that's almost everyone — this matters to you. A new payment rail could mean: - Lower transaction fees as competition increases - Faster settlement times for your money - More options for how customers pay you - Better integration with open banking systems The PDC isn't going to replace your card reader tomorrow. But it's a signal that the payments landscape is shifting. And smart businesses pay attention to shifts like this. ### The Bottom Line The UK's push for a new payments system isn't just about sticking it to the big card networks. It's about building infrastructure that works for the digital economy. And the fact that Visa and Mastercard are involved? That tells you something important — even the giants know the game is changing. Whether the PDC delivers on its promise remains to be seen. But one thing's clear: the conversation about how we pay for things is far from over.