On 21 May 2024, the Payment Systems Regulator (PSR) published an interim report on its market review into card scheme fees and processing fees. The report focuses on the market position of Mastercard and Visa, with the PSR provisionally concluding that the supply of scheme and processing services is not working in the interests of service users. The report finds that there is a lack of competitive constraints on Mastercard and Visa, which has led to undesirable price and non-price outcomes for acquirers, merchants and consumers. Consequently, the PSR has set out some remedial measures it is considering to promote better outcomes in the card scheme market.
Read on for a more detailed review of the interim report.
The PSR published its final report MR18/1.8 'Market review into card-acquiring services: Final report' in November 2021, finding that fees paid by acquirers rose significantly between 2014 and 2018, and were continuing to increase. Building on MR18/1.8, the PSR announced its intention to conduct a market review of the card scheme and processing fee market, launching the review in October 2022 with the publication of MR22/1.2 'Market review of card scheme and processing fees: Final terms of reference'. In this, the PSR clarified that the focus would be on the scheme fees and processing fees charged by Mastercard and Visa, who together are responsible for 99% of debit and credit card payments in the UK.
Take a look at our previous Engage article for more on the background to the market review: ‘Card fees: UK Payment Systems Regulator publishes final terms of reference for two market reviews’.
If you would like to discuss any aspect of the interim report or card schemes and processing fees more broadly, please get in touch with one of the people listed above or your usual Hogan Lovells contact.
Authored by Dan Park.
Card fees: UK Payment Systems Regulator publishes final terms of reference for two market reviews
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