The Payment Systems Regulator (PSR) has proposed remedies in its ongoing investigation into processing fees charged by Visa and Mastercard.
The proposed remedies include improved transparency on fees, requiring Mastercard and Visa to provide clearer pricing information for merchants and acquirers, which could reduce costs. Additionally, enhanced financial reporting will allow the PSR to effectively monitor and assess the schemes’ performance, helping to evaluate the impact of the changes and guide future regulatory actions.
The remedies also aim to strengthen pricing governance to address concerns about pricing decisions, supporting the PSR’s policy-making and supervision. Finally, the publication of scheme information will hope to increase transparency and ensure the schemes can be held accountable.
David Geale, Managing Director of the PSR, said: “The proposed remedies we have set out today are a clear way to address the findings in our final report that this market is not working well for businesses and ultimately consumers.
“Improving transparency will enable businesses to make informed choices about the card payment services they receive. These steps will also ensure we can scrutinise the performance of the card schemes and act quickly in the future if we need to take further action.”
Looking ahead, the PSR invites all interested parties, including businesses, merchants, and their representatives, to share their views by 28 May 2025. Should the regulator move forward with the remedies, a final consultation will be held on the specific details of the proposed remedy package.
Reasons for these remedies
As mentioned above, this is the latest development in the PSR’s ongoing investigation into Visa and Mastercard’s processing fees.
Prior to this announcement, the financial watchdog found that from 2017 to 2023, the payment giants raised their core scheme and processing fees by over 25%, adding at least £170m in costs annually for UK businesses.
The PSR has also expressed concerns that businesses have no alternative but to pay these fees, given the lack of competition in the market.
Despite efforts to encourage the use of alternative payment methods, UK consumers continue to prefer debit and credit cards, as shown in UK Finance’s recent report, which found a growth in both card issuance and transactions.
Visa and Mastercard’s dominance in the card-issuing market is widely seen as a duopoly, limiting innovation and hindering economic growth.
Moreover, the companies have been criticised for providing insufficiently clear or detailed information, leaving merchants and acquirers with incomplete or complex fee data, which could further increase their costs.
The PSR’s action has not gone without challenge, however. Last month, Visa and Revolut launched legal challenges against the PSR’s plans to cap interchange fees. Both firms alleged the regulator was overstepping its authority and powers.
