A final report into scheme and
processing fees has been published today by the Payment Systems
Regulator (PSR). These findings build on its interim report
published last year. The PSR has announced its intention to
consult on proposed remedies following this final report.
The report's key findings
include:
-
Rising scheme and processing fees have hampered the
ability of business to invest and grow
The report
notes: “Mastercard and Visa increased their core scheme and
processing fees to acquirers by at least 25% since 2017,
costing businesses at least £170 million extra per year. This
increased cost of doing business in the UK impacts on UK
businesses' ability to invest and grow, and could lead to
direct economic constraints, particularly for small
merchants.”
-
Complicated fee information is costing acquirers and
merchants
The report notes: “In addition, a
lack of easy-to-understand fee information has led to costs for
acquirers and merchants, including small
retailers.”
-
There is a lack of competition in the UK payments
market
The report notes: “Existing alternative payment methods to
cards do not exert effective competitive constraints on the fees
charged by Mastercard and Visa for scheme and processing
services.”
The BRC Annual Payments Survey
showed that over 85% of spending is made using credit or debit
cards in the UK. This outlines the vital importance of card
payments to the UK economy.
Chris Owen, Payments Policy Advisor at the British Retail
Consortium, said:
“This report confirms the harms arising from the lack of
competition in the card schemes market, with fees being
introduced without justification or sufficient explanation. There
has been a 25% increase in scheme fees since 2017 costing
businesses an extra £170 million per year. It's now time for
meaningful action. Following the PSR's findings, it is clear it
must go further than the proposed remedies in its interim report.
This means introducing interim pricing remedies to reduce fees
which have been an unjust burden on merchants, and working
towards the introduction of a price cap in the longer term.”
-ENDS-
- Scheme Operators – Payment networks e.g. Visa and
Mastercard
- Scheme fees – Scheme fees are those charged by scheme
operators (e.g. Visa and Mastercard) to participate in the
scheme.
- Processing fees – Processing fees are those charged by
Scheme operators to businesses for the authorisation, clearing
and settlement of payments.
