Source: Payment Systems Regulator
Following its final report into scheme and processing fees charged by Mastercard and Visa, today the PSR sets out the proposed remedies it is consulting on, designed to make improvements to the market:
- Better information for merchants and acquirers by requiring Mastercard and Visa to provide more transparency on fees so acquirers and merchants can assess and act on relevant pricing information. This should reduce costs to acquirers.
- Regulatory financial reporting to allow the PSR to effectively monitor and understand the schemes’ financial performance on fees charged in the UK. This will enable the PSR to assess the impact and effectiveness of these changes and help to shape decisions on future regulatory interventions, if any are necessary.
- Better pricing governance to address the PSR’s concerns around the schemes’ pricing decisions. This will support the PSR’s policy-making and supervisory approach with access to reliable, and comprehensive information in relation to the schemes’ pricing decisions that affect UK customers.
- Publication of scheme information to increase transparency and ensure schemes can be held to account.
Commenting on the proposals, David Geale, Managing Director of the PSR said:
“The proposed remedies we have set out today are a clear way to address the findings in our final report that this market is not working well for businesses and ultimately consumers.
“Improving transparency will enable businesses to make informed choices about the card payment services they receive. These steps will also ensure we can scrutinise the performance of the card schemes and act quickly in the future if we need to take further action.”
Why the PSR is consulting on these remedies
Card payments are critical to the smooth running of the UK economy, helping people to pay for goods and services, and businesses to accept payments. It’s important, therefore, that the market works well.
Boosting competition in this area is at the heart of the PSR’s Strategy and will also support growth in the UK economy.
In its recent market review, the PSR found that:
- between 2017 and 2023 Visa and Mastercard raised their core scheme and processing fees by more than 25% in real terms representing an extra cost of at least £170million per year for UK businesses, who have little choice but to pass these costs on to consumers or reduce investment, impacting businesses contribution to our country’s economic growth.
- Visa and Mastercard do not provide sufficiently clear or detailed information, resulting in merchants and acquirers receiving incomplete or complex information on fees, raising their costs further.
The PSR is now consulting on possible remedies, designed to address these issues, based on the evidence it gathered during its market review and which can be found in the Final Report.
What happens next?
The PSR encourages all interested parties, including businesses and merchants - and their representatives - to respond with their views by 28 May 2025.
If the regulator decides to proceed with the remedies, there will be a final consultation on the specific proposed remedy package (including a draft Cost Benefit Analysis and draft direction).
