March 6, 2025
The UK’s Payment Systems Regulator (PSR) has concluded its market review into card scheme and processing fees, finding that Mastercard and Visa have significantly increased costs for businesses while failing to provide transparent pricing information. The regulator will now consult on potential remedies to address these issues.
The PSR’s final report reveals that since 2017, Mastercard and Visa have raised their core scheme and processing fees by at least 25%, adding an estimated £170 million in extra costs per year for UK businesses. Small retailers, in particular, have been affected by the lack of clear and accessible information on these fees, which has made it harder for merchants and payment processors (acquirers) to negotiate better deals.
“Cards are a popular and convenient way to make payments in the UK, so any issues in the card market can have a negative impact on both businesses and ultimately consumers,” said David Geale, the PSR’s Managing Director.
The regulator’s investigation found that Mastercard and Visa operate in a market with insufficient competitive pressures, allowing them to impose price increases without clear justification based on cost analysis, competition, or innovation. Additionally, the PSR found that unclear fee structures contribute to market inefficiencies, raising costs for acquirers and merchants and distorting pricing signals.
The report suggests that these higher fees are limiting businesses’ ability to invest and grow, as they either absorb the costs or pass them on to consumers.
The PSR will now consult on potential remedies before taking corrective action, aiming to enhance transparency and competition in the card payment market.
“We have found that there is a lack of competition in the market and evidence that Mastercard and Visa might have been able to charge UK businesses millions of pounds more than they would in a properly competitive market,” Geale added. “We look forward to engaging with stakeholders on how best to address these issues.”
The next steps in the process will involve a consultation period where businesses, financial institutions, and other stakeholders can provide input on proposed regulatory actions.
