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U.K.’s Payments Regulator Fines Mastercard, Four Others for Cartel Behaviour

U.K.’s Payment Systems Regulator (PSR) has fined Mastercard (MA) and four more companies a total of £33 million ($45 million) for having formed a cartel in the prepaid cards market. The news was first reported by Reuters.

Mastercard has been slapped with the largest fine of £31.6 million, followed by Prepaid Financial Services at £0.9 million. The other companies involved in the cartel include Advanced Payment Solutions, allpay and Sulion.

The decision follows PSR’s investigation that began in October 2017, following a complaint made by allpay about an infringement. Notably, the regulator found out that the five parties infringed competition law by not competing or poaching each other’s customers in the prepaid cards market in Great Britain.

The cards concerned were actually being used by the local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers. 

PSR’s Managing Director, Chris Hemsley, said, “This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour. We will intervene and enforce the law strictly to ensure there is effective competition in payments markets.”

Mastercard Earnings

The company’s EPS for Q4 2021 is estimated to reach $2.21. MA stock earnings have surpassed estimates in all quarters since Q4 2020. Given the company’s strategic growth efforts and demand for online or card-related transactions, Mastercard will likely beat estimates again in the upcoming earnings.

Overall, the analysts are optimistic about the stock with a Strong Buy consensus rating based on 12 unanimous Buys.

Dividend History

The company has raised its quarterly common stock dividend to $0.49, up 11.4% from the previous payout, which is payable on February 9. Since 2014, MA stock dividend has been increasing once each year in January with the trend continuing in 2022 as well, which makes it one of the Top Dividend Stocks on TipRanks.

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