Senior UK bank executives will meet this week to begin creating a domestic card payments network.
The project aims to reduce reliance on Visa and Mastercard, which handle about 95% of UK card transactions.
The talks will be chaired by Vim Maru of Barclays and involve major lenders and payment firms.
City institutions will fund the new company, while the government supports the plan.
Officials want a backup system in case existing networks suffer political, cyber or operational disruption.
Concerns have grown over geopolitical tensions and the risk of foreign-owned systems being switched off.
Sanctions that halted card services in Russia highlighted the potential impact of such a move.
The initiative, known as DeliveryCo, will design the legal structure, leadership and funding model.
The Bank of England is preparing the technical blueprint, with a launch expected around 2030.
Visa and Mastercard are participating in the discussions and say they welcome competition.
UK authorities describe the project as a way to strengthen resilience as cash use continues to decline.
