The Payments Systems Regulator (PSR) has published its final report on the market review into card scheme and processing fees, revealing significant fee increases by Mastercard and Visa that are impacting businesses.
Key findings: rising fees and a lack of transparency
The PSR’s investigation found that Mastercard and Visa have increased their core scheme and processing fees to acquirers by at least 25% since 2017, amounting to an additional cost of at least £170 million per year for businesses. The report highlights that these increases have not been accompanied by clear, cost-based justifications, raising questions about competition and fairness in the market.
Another major issue identified by the PSR is the lack of easy-to-understand fee information. Businesses, particularly acquirers and merchants, struggle to navigate complex and incomplete fee structures, making it difficult to negotiate better deals or accurately assess the impact of these costs. As a result, they either absorb the increased fees or pass them on to consumers, affecting pricing, profitability, and investment potential.
Potential remedies and next steps
In response to its findings, the PSR has announced that it will soon consult on potential remedies to address these issues. While the details of these remedies have yet to be determined, they could include measures to increase transparency, introduce greater competition, or enforce pricing regulations.
