Mastercard and Visa under fire from Payment Systems Regulator
Hey FinTech Fanatic!
The Payment Systems Regulator (PSR) in the UK has released an interim report on card scheme and processing fees, focusing on Mastercard and Visa. The PSR is now seeking feedback on its provisional findings to inform its final report.
The PSR's interim report reveals that Mastercard and Visa dominate the market, lacking effective competition in both core scheme and processing services, as well as some optional services. Alternative providers struggle to match the comprehensive offerings of these giants.
Over the past five years, Mastercard and Visa have increased their fees by over 30% in real terms, without a corresponding improvement in service quality. With these two companies handling 95% of UK-issued card transactions, businesses have little choice but to absorb these rising costs. Non-card payment methods are not viable competitive alternatives.
Key issues identified by the PSR include:
- Complicated and unclear pricing statements from Mastercard and Visa.
- Acquirers face difficulties in accessing fee information and negotiating fees.
- Frequent delays and insufficient notice for fee changes.
The PSR proposes several remedies to enhance transparency and competition:
- Better transparency to help businesses and acquirers make informed decisions.
- Obligations for Mastercard and Visa to explain and document price changes.
- Increased reporting of financial information to improve oversight.
Chris Hemsley, Managing Director of the PSR, emphasized the need for transparency and effective competition to protect businesses. The PSR is consulting on these findings and potential remedies, with feedback open until 30 July 2024.
Also, Mark your calendars for Wednesday, June 5th for the upcoming webinar where Ingo Payments CRO, Lydia Inboden, along with industry experts from TBK Bank, SSB, Fundbox, and Pipe, will delve into the world of real-time payments.
Have a great weekend and I'll be back on Monday!
Cheers,
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