U.K.’s PSR publishes report on market review of card scheme, processing fees

The U.K.’s Payment Systems Regulator, PSR, published an interim report for its market review into card scheme and processing fees. In the report, the PSR said every time people use a Mastercard (MA) or Visa (V) debit or credit card for transactions with UK businesses, UK businesses pay scheme and processing fees, some of which are mandatory or core and some of which are optional. Following increases in these fees, the Payment Systems Regulator, PSR, has been examining the level of these fees to understand whether they, or other factors, indicate the market is not working well. The PSR has set out its provisional concerns that Mastercard and Visa do not face effective competition when dealing with merchants and acquirers, in respect of core scheme and processing services. The interim report sets out possible remedies to address the issues identified. Subject to the PSR’s final report and further consultation on remedies, possible remedies could include: improved transparency, obligations on Mastercard and Visa to explain reasons for price changes, and greater reporting of financial information.