Twenty European banks are working on setting up a pan-European payment system to challenge the dominance of Visa, Mastercard and technology companies such as Google and PayPal, European banking and government sources confirmed, French news agency AFP reports.

The Pan European Payment System Initiative (PEPSI) would handle all forms of cashless transactions, the sources said.

Carlo Bovero, global cards and retail payments manager at BNP Paribas had alluded to it Tuesday during a conference organised by the banking magazine Revue Banque in Paris.

Bovero said banks “representing a big part of Europe” were involved in the discussions.

A French banking source close to the subject said the idea came from the European Central Bank, which has been pushing for a system to allow Europeans to transfer money to each other instantly.

The source, who asked not to be named, said the ECB was “worried about the sovereignty of payments and explained that it would appreciate if we looked into the issue,” adding that it was chiefly a “political not a technical initiative”.

Apart from US card companies, Europeans are also seeking an alternative to US and Chinese technology giants such as Google and Alipay.

Jerome Reboul, a senior French treasury official, told the Revue Banque conference that “in the past two years opinions on the future of payments has changed considerably” in Europe.

In a sign of the sensitive nature of the discussions, however, none of the big banking groups contacted by AFP would speak openly about the project.

However several sources told AFP that the participants included most French banks as well as Germany’s Deutsche Bank.

Political initiative? pan european payment system initiative

The source, who asked not to be named, said the ECB was “worried about the sovereignty of payments and explained that it would appreciate if we looked into the issue,” adding that it was chiefly a “political not a technical initiative”.

Giving voice to concerns that European payments could be jeopardized in the event of a row with the US, one banker complained: “All we need is for a disgruntled American president to take the decision to cut payments and then we’ll see how dependent we are.”

This is not the first time European banks have tried to launch a pan-European payment system, following the Monnet card project launched in 2012 which never took off.