Payments systems regulator to review card fee increases
On Tuesday June 21, the UK Payments Systems Regulator (PSR) detailed plans for two market reviews it will carry out focusing on card fees. One will look at scheme and processing fees, and the other will look at cross-border interchange fees.
Focusing on the Mastercard and Visa networks, which together account for 99% of debit and credit card payments in the UK, both reviews are being put in place in response to rising fees.
Regarding plan and processing fees, the announcement follows an earlier review in which PSR found that fees paid by acquirers increased significantly from 2014 to 2018. Since then, stakeholders have reported to the authority that the scheme charges continued. rise.
With regard to cross-border interchange fees, PSR found that these have also increased significantly over the past year. Since the UK left the EU, the PSR reports that Visa and Mastercard have quintupled these fees. The body launches the review: “to understand the rationale for these increases and whether they indicate that the market is not working well”.
In an article on the regulator’s website: Natalie Timan, Chief Strategy Officer at PSR, said:
“Cards are the most popular way for consumers to make a payment. To accept card payments, merchants must pay certain fees that can ultimately impact the cost we all pay for goods and services. We want to understand if card payments work well and ensure that merchants, and ultimately consumers, get a good deal.
“We have been gathering information since the beginning of this year and have identified that a detailed review of the market is needed. We have defined what we will assess in these reviews, which will then inform any decision on what action we may need to take to promote effective competition or to remedy any harm.
Currently in draft form, the terms of reference for market reviews are open for consultation until Tuesday 2 August. The PSR welcomes comments on the draft terms of reference, in particular the consultation questions. He welcomes any evidence in support of the opinions submitted.
During the consultation period, PSR will also host a series of engagement events and encourages stakeholders to attend to help shape the scope of the impending reviews.
Rising cross-border fees are just the latest in a series of hurdles that UK-based companies exporting to the EU have faced following the country’s exit from the bloc.
Read more: Lack of payments integration is hampering the growth of smaller UK e-commerce sites