PSR Faces Criticism for ‘Failure of Vision’ in Addressing Card Scheme Fee Remedies
The recent consultation by the Payment Systems Regulator (PSR) aims to enhance transparency in card payment fees for merchants and acquirers, addressing significant concerns raised in its latest market review. This initiative is crucial as Visa and Mastercard have increased their core scheme and processing fees by over 25% between 2017 and 2023, resulting in an additional burden of at least £170 million annually for UK businesses.
Key Findings from the PSR Market Review
The PSR’s market review highlighted several critical issues regarding the operations of card scheme operators. Here are the main findings:
- Fee Increases: Visa and Mastercard raised their fees significantly, impacting UK businesses financially.
- Lack of Transparency: Merchants and acquirers received unclear and complex information about fees.
- Need for Regulatory Action: The PSR identified the necessity for improved pricing governance and regulatory reporting.
Proposed Remedies for Improvement
David Geale, the managing director of the PSR, stated, “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.” The proposed measures include:
- Increased Transparency: Enhanced clarity on fees will help businesses make informed decisions.
- Stricter Pricing Governance: Requirements for regulatory reporting to ensure accountability among card schemes.
- Future Scrutiny: Ongoing evaluation of card scheme performance to enable quick regulatory responses.
Industry Reactions to the Consultation
The British Retail Consortium (BRC) has criticized the proposals, claiming they do not adequately address the existing problems. Chris Owen, payments policy advisor at the BRC, commented:
“Today’s consultation represents a failure of vision by the PSR. Their proposed remedies fall well short of the robust measures needed to tackle the harms that have arisen from the dominance of the card scheme operators.”
He emphasized that the PSR must utilize its regulatory powers to implement pricing interventions and establish a long-term price cap to effectively lower fees and promote lasting reforms.
Conclusion
As the consultation progresses, stakeholders are encouraged to engage actively to foster a more transparent and fair card payment environment. For more information on the PSR’s findings and proposals, you can visit the Payment Systems Regulator’s official website.
