UK regulator fines five payment companies over £33m each for anti-competitive behavior – JURIST

The UK Payments Systems Regulator (PSR) on Tuesday find five payment companies, Mastercard, allpay, Advanced Payment Solutions (APS), Prepaid Financial Services (PFS) and Sulion, violated competition law by agreeing not to compete with each other or poach their customers in the market UK prepaid cards.

The case concerns the issue of prepaid cards used by local authorities to distribute social benefits to vulnerable members of society, such as homeless people, victims of domestic violence and asylum seekers. The only payment system used for prepaid cards was Mastercard, and even for the short time Mastercard sponsored and fully funded the National Prepaid Card Network (Network) and had members from the public sector, including Mastercard program managers (PM).

The PRS found that the companies were involved in two market-sharing agreements in violation of the Competition Act 1998. One was a long-term cartel between the five companies that lasted from 2012 to 2018 and the other involved APS and PFS from 2014 to 2016.

The current PRS decision was based on the investigation opened against the companies in October 2017, which was followed by a complaint from allpay against one of the breaches. During the investigation, the PRS also carried out unannounced searches at the premises of some of the parties.

The PRS, in its tentative conclusions, published in March 2021, revealed that five companies had reached an agreement that PMs connected to different networks should not poach public sector customers from each other. The companies have also agreed to exclusively allocate leads from network promotional events among network PMs. Finally, the separate arrangement between APS and PFS did not cover each other’s public sector customers when a contract was to be renewed, including through a public tender.

The PRS upheld the provisional findings and fined each company more than £33million for the cartel.


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Elaine R. Knight