The UK’s Payment Systems Regulator has set out how it intends to carry out two market reviews focusing on card fees.
One review will consider scheme and processing, the other will examine cross-border interchange fees.
Both reviews focus on Mastercard and Visa; the two payment system operators make up 99% of debit and credit card payments in the UK, both by volume and value.
The PSR says card payments use is popular and growing with 21 billion UK issued debit card payments totaling £702 billion in 2021.
The reviews will “inform any decisions on the steps we might need to take to promote effective competition or to address any harm”, the PSR says.
The PSR is looking at scheme and processing fees because the agency’s card-acquiring market review (CAMR) found that the fees paid by acquirers had increased significantly from 2014 to 2018.
The market review will build on this review, examining the levels, structure and types of scheme and processing fees.
Similarly, cross-border interchange fees have also “increased significantly” in the last year, the PSR says.
In particular, the PSR wants to determine whether these fees, which are applied to certain transactions between the UK and European Economic Area and which have risen five-fold since Brexit, indicate that the market is working well.
PSR’s head of strategy Natalie Timan says: “To accept card payments, merchants must pay certain fees which can ultimately impact the cost we all pay for goods and services.
“We want to understand whether card payments are working well and to make sure that merchants, and ultimately consumers, get a good deal.”