UK Market Reviews Visa and Mastercard fees In 2 Years

Merchants may have to wait an additional two years, according to the Payment Systems Regulator, before the market evaluations of Mastercard and Visa card fees are finished.

Two market studies investigating card fees and post-Brexit interchange costs imposed by card systems on UK businesses have been launched by the watchdog.

An prior investigation of card-acquiring services found that between 2014 and 2018, scheme and processing costs have dramatically risen. The regulator is now taking things a step further by carefully examining the kinds, amounts, and structures of scheme and processing fees.

According to the PSR, it plans to submit a report outlining its preliminary findings about the card system and processing fees in the fourth quarter of 2023 and a comprehensive report, which would include any suggested remedies, in the second quarter of 2024.

The watchdog said it will provide an interim conclusion in Q3 2023 and its full report in the fourth quarter of 2023 on the “fivefold” increase in consumer cross-border interchange fees between the UK and the EU.

Chris Hemsley, managing director at the PSR states: “Cards are the most popular way for people to make payments in the UK, but the concerns we have heard indicate that businesses could be paying over the odds by the fees imposed by Visa and Mastercard.

“We are moving as quickly as we can, but this is a complex issue to assess fully, and we want to make sure we take the right course of action – especially as it affects millions of businesses in the UK.”

The slow timeline will be a setback for merchant trade associations, who have been railing about rising costs and a lack of meaningful competition in the card acquiring industry for the last four years.