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 currently handle about 95% of UK card transactions.
The meeting will be chaired by Vim Maru of Barclays.
City institutions will fund the new company, known as DeliveryCo, with government support.
Officials want a backup system in case foreign networks are disrupted.
Concerns have grown over geopolitical tensions and the risk that US-owned payment rails could be switched off.
The decline of cash means any outage would severely affect the economy.
Major lenders including Lloyds Banking Group, NatWest, Santander UK and Nationwide Building Society are involved.
Visa and Mastercard are also participating in the initiative.
The Bank of England will design the infrastructure, with a launch expected around 2030.
Officials say the system would strengthen resilience rather than replace existing providers.
