Payment Systems Regulator Announces Interim Market Review Report

The Payment Systems Regulator (PSR) has issued an interim report suggesting that Mastercard and Visa do not face effective competition in providing scheme and processing services to acquirers. This lack of competition is allowing the two biggest card schemes to raise prices, leading to substantial fee increases over the past five years.

The report highlights that core and optional service markets are dominated by Mastercard and Visa, with limited effective alternatives. As a result, UK businesses, reliant on these cards for 95% of transactions, are forced to pay rising fees without improved service quality.

The PSR has identified the need for better transparency and clearer pricing statements. Potential remedies include enhanced reporting and obligations for Mastercard and Visa to explain price changes. Feedback on the report is sought until 30 July 2024, with a final report expected in Q4 2024.