MR22/1.9: Market review of card scheme and processing fees interim report

We have published the interim report for our market review into scheme and processing fees. We are now seeking views on our provisional findings and proposed approach to remedies to help inform our final report.

Why are we publishing this document and what does it contain?

Cards are the most popular way for consumers to pay for goods and services in the UK, so it is crucial that the market works well.

Every time people use a Mastercard or Visa debit or credit card for transactions with UK businesses, UK businesses pay scheme and processing fees, some of which are mandatory or core and some of which are optional.

Following increases in these fees, the PSR has been examining the level of these fees to understand whether they, or other factors, indicate the market is not working well.

The PSR has set out its provisional concerns that Mastercard and Visa do not face effective competition when dealing with merchants and acquirers, in respect of core scheme and processing services.

The interim report sets out possible remedies to address the issues identified. Subject to the PSR’s final report and further consultation on remedies, possible remedies could include:

• improved transparency so that businesses and acquirers can make informed decisions and are more able to switch to alternative suppliers of optional services
• obligations on Mastercard and Visa to explain, consult and/or document the reasons for price changes and the pricing of new services
• greater reporting of financial information to the PSR on an on-going basis to improve scrutiny of Mastercard and Visa’s UK operations going forward.

Who should read this document?

The PSR is keen to receive feedback on its provisional findings and proposed approach to remedies from anyone with an interest in retail payments in the UK - particularly issuers, acquirers, card scheme operators, businesses, and cardholders.

What happens next?

The window for giving feedback is open until 30 July 2024.

The PSR intends to publish its final report on scheme and processing fees in Q4 2024, but will confirm these timeframes in due course. If the final report upholds the provisional finding that the market is not working well, the PSR will consult on the implementation of any remedies.