Today, the Payment Systems Regulator (PSR) has published its final terms of reference for a market review into the supply of card-acquiring services.

Card payments are an increasingly important payment method, with debit cards becoming the most frequently used payment method in 2017.

For businesses to accept card payments, they need to buy card-acquiring services. The cost of these may affect the prices and services they offer to their customers.

The PSR is carrying out this review following concerns that the market may not be working well for merchants, and therefore consumers. The regulator published the draft terms of reference for this market review in July 2018. The final terms of reference take into account the valuable feedback the PSR received during the consultation period. The final terms of reference explain what will be included in the review, and what the regulator will be initially considering along with its next steps. 

The final terms of reference set out the PSR’s approach to conducting the market review, which includes looking at:

  • the nature and characteristics of card-acquiring services;
  • how merchants buy card-acquiring services;
  • who provides card-acquiring services and how their market shares have developed historically;
  • whether there are credible alternatives to card-acquiring services for some or all merchants;
  • what the market is delivering for merchants and consumers, including the fees merchants pay and the quality of service they receive.

“Consumers and businesses rely on payments made by cards more than ever before. That’s why this is an important review.

“We want to make sure the card-acquiring market is working for businesses and ultimately consumers. If we find that the market is not working well, we will look to make changes.”

The PSR will now conduct the review as set out in the final terms of reference and is aiming to publish an interim report by the end of 2019, presenting the analysis and preliminary conclusions for consultation. Following this, the PSR will publish a report containing the final findings of the review and any further action to be taken.