UK payment systems regulator fines Mastercard £31.5m for breaching competition law
The UK Payments Systems Regulator (PSR) has found that Mastercard, alongside four other parties, breached competition law by agreeing not to compete in the prepaid card market.
The PSR, which regulates the £81 trillion payment systems industry in the UK, has fined over £33 million against the five companies – Mastercard, allpay, Advanced Payment Solutions (APS), Prepaid Financial Services (PFS) and Sulion.
The regulator says the five parties have agreed not to poach or target each other’s customers while operating under the nation’s prepaid card network, forming a market-sharing cartel.
The National Prepaid Card Network has brought together public sector bodies such as local authorities and housing associations with prepaid card companies to distribute social benefits.
PSR says the parties have also agreed to divide potential new contacts with public sector customers between them.
A second deal involved a separate agreement between APS and PFS not to target each other’s public sector customers when a contract was up for renewal.
The PSR opened its investigation in October 2017, with unannounced searches of the premises of some of the parties in February 2018.
During the investigation, all parties came to an agreement and admitted breaking the law.
Mastercard was fined £31,560,062. PFS and APS were fined £916,746 and £755,419 respectively. allpay and Sulion were fined £28,553 and £572, respectively.
PSR chief executive Chris Hemsley said the case was particularly serious because the companies’ actions have reduced competition and choice for local authorities, meaning they may have missed out on cheaper products or of better quality that were used by some of the most vulnerable in society. .
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behavior,” adds Hemsley.