Cyber Threats Spark Iceland Plan to Process Payments at Home

Iceland is creating a domestic payments infrastructure to ensure it can process transactions even if the island is cut off from the rest of the world.

Connected to other countries by four submarine data cables, the North Atlantic nation wants to ensure payments can be made even if there’s no internet connection out of the country. Today, more than 90% of all retail payments go through Visa Inc. and Mastercard Inc., which process them abroad, according to the central bank.

While it’s unlikely for all cables to be out of service at the same time, the Sedlabanki is now ...