Helena Lyng Blak
3 weeks ago

Mastercard and Visa Under Scrutiny

UK regulators find that the payment card market is “not working well”.
Banking payment cards Visa and Mastercard — Photo by Vicdemi
Banking payment cards Visa and Mastercard — Photo by Vicdemi

On Tuesday, May 21, 2024, the United Kingdom Payment Systems Regulator (PSR) published an interim report for its market review into scheme and processing fees, suggesting that the supply of scheme and processing services in the country is not “working well.” 

The PSR specifically named payment card juggernauts Mastercard and Visa in its report, saying that the duo faces no effective competition to prevent the two businesses from hiking fees unnecessarily.

According to the PSR, Mastercard and Visa have increased their fees by more than 30% in real terms over the last five years, with little to no evidence of improvement in services that may explain such price surges. 

“Every time someone uses a Mastercard or Visa card, UK businesses have to pay fees. These fees have significantly increased over recent years, and those increases cannot be explained by improvement in service quality,” said Chris Hemsley, Managing Director of the PSR. 

The PSR further highlighted troubles surrounding the lack of transparency of and option to negotiate prices, with Hemsley stating,


“We have also identified concerns about the transparency and quality of information available to those providing card services to businesses. Competition does not appear to be protecting businesses effectively.”

Moving forward, the PSR will be seeking feedback on its interim report until the end of July, after which the regulators will publish a final report. Should the final report uphold these provisional findings, the PSR may implement remedial measures. 

The remedies may include steps to ensure improved transparency and obligations on Mastercard and Visa to explain or consult on the reasons for price changes.  

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

3 hours ago Federal Reserve Sees Progress on Inflation, Adjusts Rate Cut Expectations The Federal Reserve has adjusted its forecast for rate cuts this year, citing persistent inflation despite recent progress. High borrowing costs are expected to linger, impacting consumers and the broader economy.
4 hours ago Bitcoin Holds Steady as Fed Maintains Interest Rates: A Sign of Economic Caution In a cautious move, the U.S. Federal Reserve opted to keep interest rates unchanged, causing Bitcoin to hold its ground. Read more about the economic implications and market responses here: "The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year."
7 hours ago High-Stakes Showdown: Tesla Shareholders Decide on Elon Musk’s $56B Pay Package Tesla shareholders are set to cast their votes on Elon Musk's controversial $56 billion compensation package, a decision that could have far-reaching consequences for the company.
11 hours ago USDMXN: A Golden Opportunity USDMXN: A Golden Opportunity Amid Mexican Election Sell-Off, Says Steno Research Analyst
1 day ago EU's New Tariffs on Chinese EVs Hit Tesla and BYD Stocks! Tesla (TSLA) and BYD (1211) Stocks Plummet After EU Tariff Announcement
1 day ago Macro Mondays: Escaping the TRAP of Sideways Markets Andreas Steno, Mikkel Rosenvold And Mads Eberhardt talk macro and crypto
1 day ago EU launches trade war with China In a bold move that has sent ripples through global markets, the European Union has effectively launched a trade war against China. This decision, announced just three days after the European Parliament elections, raises significant questions about the influence and timing of the EU’s legislative body.
1 day ago July Bloodbath: Metals Set for Major Crash? Brace yourselves for a tumultuous July in the metals market! Industry experts are sounding the alarm as cluster risks in metals like gold, silver, and copper threaten a significant downturn. Here's why July could spell disaster for metal investors.
1 day ago 5 Stories To Invest in for Emerging Markets 5 Stories that might interest you if you're into investing in Emerging Markets