Payment Watchdog launches inquiry as schemes boast record results


The Payment Systems Regulator (PSR), has announced (on 27th October 2022) that they are set to launch two separate market reviews of the fees charged by Visa and Mastercard - one looking at scheme and processing fees and the other at cross-border interchange fees.

Payment Systems Regulator

The UK watchdog commented that they had ‘been gathering information since the start of 2022 and have identified that a detailed review of the market is needed.’ To ensure ‘card payments are working well and to make sure that merchants, and ultimately consumers, get a good deal.’, especially when you consider that Mastercard and Visa account for 99% of debit and credit card payments in the UK.

Interestingly, Visa - The world’s largest global electronic payment solutions provider announced in the same week that they had surpassed expectations in the last quarter, with net revenues increasing 19% y-o-y to $7.3 billion. It was mainly driven by a 14% y-o-y rise in nominal payments volume, a 16% increase in the number of processed transactions, and a 38% jump in the cross-border volumes.

Cross-border interchange fees for certain card transactions between the UK and the European Economic Area (EEA) have increased significantly in the last year. Post Brexit, Visa and Mastercard have increased fees on certain card types, five-fold, prompting the PSR to act, stating it wants to understand the rationale behind these increases and whether they are an indication that the market is not working well.

Chris Hemsley of the Payment Systems Regulator (PSR)

Chris Hemsley, managing director at the PSR states: “Cards are the most popular way for people to make payments in the UK, but the concerns we have heard indicate that businesses could be paying over the odds by the fees imposed by Visa and Mastercard. “We are moving as quickly as we can, but this is a complex issue to assess fully, and we want to make sure we take the right course of action - especially as it affects millions of businesses in the UK.”

In relation to the five-fold rise on consumer cross-border interchange fees between the UK and the EU, the watchdog says it will publish an interim conclusion in Q3 2023 and its final report in the fourth quarter, but merchants will face a 2-year wait for the proposed remedies within the final report, scheduled for Q2 of 2024.

Steven Jones of Gala Technology

Steven Jones, Commercial Director at Fintech company Gala Technology commented ‘After two years of a global pandemic, where businesses were squeezed more than ever, followed by a cost-of-living crisis, any increase in payment processing will surely end up with the consumers, as businesses may have to pass on the increases.

For any organisations that would like to check whether there is a better deal out there in the market, I would like to inform them that Gala Technology offer a free payments review, where we can compare processing rates, service and settlement times, potentially introducing the latest payment technology such as Open Banking for Account2Account payments, as we look to improve efficiency and cost.’





Don't Wait; Request a Priority Callback Now

Fill out the form, and a professional payment advisor will contact you.






Armor Secure Hosting    DMARC - Email Protection    PCI Compliant

Gala Technology Limited, Unit 10 Farfield Park, Manvers, Rotherham, South Yorkshire, S63 5DB
what3words location ///balance.buyers.shrug


         



Copyright © 2015 - 2024 Gala Technology Limited. All Rights Reserved.

Close

Don't leave just yet!

Get the brochure

Snatch this SOTpay Brochure with pricing straight to
your inbox and resume like a Boss whenever it suits you!

BEGIN YOUR FREE TRIAL