Regulator consults on new rules after finding Mastercard and Visa face weak competitive pressure on acquiring-side fees
The UK’s Payment Systems Regulator has launched a consultation on new measures designed to increase transparency and oversight of card scheme and processing fees, following a market review which found rising costs and limited competitive constraint in the UK card payments market.
The proposals target the fees paid by acquirers to the card schemes operated by Visa and Mastercard, which are ultimately passed on to merchants.
The regulator said businesses currently lack clear, actionable information about how those fees are set or why they change, limiting their ability to respond or negotiate effectively.
Market review finds weak competitive pressure
The PSR’s intervention follows its scheme and processing fees market review, which concluded Visa and Mastercard do not face effective competition on the acquiring side of the market.
According to the regulator, fees for mandatory services have increased in recent years, while acquirers often struggle to understand pricing structures or predict the impact of fee changes.
The PSR also found limited evidence that new or increased fees are consistently linked to changes in underlying costs, and said pricing decisions are not always supported by clear internal documentation.
Two remedies proposed
To address these concerns, the PSR is consulting on draft directions that would introduce two remedies.
The first, Information Transparency and Complexity (ITC), would require card schemes to provide acquirers with clearer and more usable pricing information. The aim is to help acquirers better understand fee structures, assess changes and make informed commercial decisions, with knock-on benefits for merchants. The PSR expects to allow up to 12 months for implementation once a final decision is made.
The second remedy focuses on pricing governance. Under the proposal, schemes would be required to apply a defined pricing decision principle when setting or changing UK scheme and processing fees, and to create formal records explaining how that principle was applied. These records would be available to the PSR as part of its supervisory oversight.
The regulator is also proposing new compliance requirements, including annual reporting to demonstrate adherence to the pricing governance standards and an annual overview of fee decisions. A materiality threshold would apply, meaning fee changes expected to generate less than £100,000 in net annual revenue would be excluded from the substantive requirements.
Additional reporting on profitability
Alongside the two remedies, the PSR said it is developing a separate regulatory financial reporting framework to improve its visibility of scheme revenues, costs and profitability in the UK. A further consultation on the detail of this reporting regime is expected in spring 2026.
The regulator confirmed it has decided not to pursue a previously considered requirement for public disclosure of scheme profitability, citing concerns about proportionality and potential unintended consequences.
David Geale, managing director of the PSR, said the proposals would give acquirers and merchants “the information and confidence they need to navigate fees and make better decisions”, while strengthening the regulator’s ability to monitor the market.
The consultation on the draft directions is now open, with responses due by February 2026. Following the consultation, the PSR will decide whether to impose final directions on the card schemes and set out an implementation timeline.
