The Payment Systems Regulator has set out a series of remedial measures to address the scheme and processing fees imposed on merchant by Visa and Mastercard.
The consultation sets out remedies to require the card scheme operators to increase transparency on fees to merchants and acquirers, and requirements on pricing governance and regulatory reporting to the PSR.
In its recent market review, the PSR found that between 2017 and 2023 Visa and Mastercard raised their core scheme and processing fees by more than 25% in real terms representing an extra cost of at least £170million per year for UK businesses. The review also criticised the card schemes for not providing sufficiently clear or detailed information, resulting in merchants and acquirers receiving incomplete or complex information on fees.
David Geale, managing director of the PSR says: “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.”
The British Retail Consortium has hit out at the proposals, describing them as "falling well short" of what is needed to fix the problems that exist.
Chris Owen, payments policy advisor at the merchant lobby group says: “Today’s consultation represents a failure of vision by the PSR. Their proposed remedies fall well short of the robust measures needed to tackle the harms that have arisen from the dominance of the card scheme operators.
"The PSR must act on its regulatory responsibilities and use its powers to mandate pricing interventions and a longer-term price cap to meaningfully lower fees and bring lasting reform to the market. Otherwise, the card schemes will continue to exploit their dominance, and retailers - and their customers - will continue to pay the price.”