The Payment Systems Regulator (PSR) has outlined a series of remedial measures aimed at addressing the scheme and processing fees imposed on merchants by Visa and Mastercard.
The consultation proposes remedies that require card scheme operators to enhance transparency regarding fees for merchants and acquirers. It also introduces requirements for pricing governance and regulatory reporting to the PSR.
A recent market review conducted by the PSR revealed that from 2017 to 2023, Visa and Mastercard increased their core scheme and processing fees by over 25% in real terms, resulting in an additional annual cost of at least £170 million for UK businesses. The review also criticized the card schemes for their lack of clarity and detail, leaving merchants and acquirers with complex and incomplete information on fees.
David Geale, managing director of the PSR, stated: “The proposed remedies we have put forward today clearly address the findings in our final report that this market is not functioning effectively for businesses and, ultimately, consumers.
“Enhancing transparency will provide businesses with the ability to make informed decisions about the card payment services they use. These measures will also allow us to monitor the performance of the card schemes and take swift action in the future if necessary.”
However, the British Retail Consortium has expressed dissatisfaction with the proposals, labeling them as “falling well short” of what is necessary to resolve existing issues.
Chris Owen, payments policy advisor at the merchant lobby group, stated: “Today’s consultation represents a lack of vision by the PSR. Their proposed remedies do not meet the robust measures required to confront the challenges posed by the dominance of the card scheme operators.
“The PSR must fulfill its regulatory responsibilities by implementing necessary pricing interventions and establishing a long-term price cap to effectively reduce fees and bring about meaningful reform in the market. If they fail to do so, the card schemes will continue to exploit their dominance, leaving retailers—and their customers—paying the price.”