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The Payment Systems Regulator (PSR) has unveiled a set of new remedies in response to its conclusions that the UK card market is not working well.
In a new consultation document, the regulator sets out steps that it believes will help address concerns that the card schemes are charging excessive fees due to a lack of competitive constraints.
“The proposed remedies we have set out today are a clear way to address the findings in our final report that this market is not working well for businesses and ultimately consumers,” said David Geale, managing director at the PSR.
The PSR's document outlines several key proposals, including measures to enhance transparency, regulatory financial reporting and governance around pricing decisions.
“Improving transparency will enable businesses to make informed choices about the card payment services they receive,” said Geale.
“These steps will also ensure we can scrutinise the performance of the card schemes and act quickly in the future if we need to take further action.”
The regulator is seeking feedback from stakeholders before finalising its approach, with a deadline of May 28, 2025.
What are the proposals?
The PSR is proposing a series of remedies aimed at improving transparency and competition in scheme and processing fees — the charges that card schemes such as Mastercard and Visa impose on acquirers for access to their networks and transaction processing services.
One key measure is the Information Transparency and Complexity (ITC) remedy, which aims to give acquirers and merchants clearer insights into the fees they are charged.
By enhancing access to this information, the PSR hopes to drive better pricing outcomes and ultimately deliver lower costs.
To strengthen regulatory oversight, meanwhile, Mastercard and Visa would be required to provide annual financial statements under a new Regulatory Financial Reporting (RFR) measure.
This would allow the PSR to assess their profitability and determine whether further intervention is necessary.
The regulator is also proposing stricter governance around pricing decisions.
Under these new rules, Mastercard and Visa would need to document and justify how they set fees, enabling the PSR to scrutinise their decision-making and assess whether their pricing reflects competitive market conditions.
In addition, the regulator plans to make more data on Mastercard and Visa’s UK operations publicly available.
This would increase transparency and help stakeholders, including merchants and acquirers, better understand how fees relate to the services provided.
The PSR emphasised that these remedies are intended to promote competition and instill a culture of fairer pricing for businesses and consumers.
The response so far
The response from stakeholders in the payments ecosystem has so far been mixed, with the card schemes apparently more comfortable with the proposals than the retail lobby.
A spokesperson for Mastercard told Vixio that the company “will continue to engage proactively with the PSR, ensuring that the UK payments landscape remains innovative and keeps delivering value to the UK economy”.
A spokesperson for Visa echoed this, stating that “we will continue to engage constructively with the PSR and will respond to the remedies consultation”.
The spokesperson added that “Visa’s fees reflect the immense value that we provide to financial institutions, merchants and consumers in the UK. This includes extremely high levels of security and fraud prevention, near-perfect operational resilience and reliability, and a wide range of consumer protections and high-quality products and services that serve consumer and merchant needs.”
In contrast, Chris Owen, payments policy advisor at the British Retail Consortium, said that the proposals represent “a failure of vision by the PSR” and that they “fall well short of the robust measures needed to tackle the harms that have arisen from the dominance of the card scheme operators”.
Owen stated that retailers “have long been weighed down by the high cost of card payments”, pointing out that the PSR has identified “enduring competition problems and inefficiencies that cause serious harm” to the retail market.
“The PSR must act on its regulatory responsibilities and use its powers to mandate pricing interventions and a longer-term price cap to meaningfully lower fees and bring lasting reform to the market,” he said.
“Otherwise, the card schemes will continue to exploit their dominance, and retailers — and their customers — will continue to pay the price.”
