Mastercard fined £31m for prepaid cards market failings

Mastercard has been fined £31.6m by the Payment Systems Regulator (PSR) for infringing competition law.

The PSR concluded that Mastercard, along with four other parties, had infringed competition law by agreeing not to compete or poach each other’s customers in the UK prepaid cards market.

The pre-paid cards in question were used by local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.

In a decision issued today, the PSR has imposed fines totalling more than £33m for each party’s participation in the illegal conduct, with the largest issued to Mastercard. Prepaid Financial Services (£916,746), Advanced Payment Solutions (£755,419), allpay (£28,553) and Sulion (£572) were also handed fines for infringements.

The PSR confirmed that its decision concludes an investigation first opened in October 2017, before provisional findings of the case were first revealed in March 2021.

“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour,” commented PSR managing director, Chris Hemsley. “We will intervene and enforce the law strictly to ensure there is effective competition in payments markets.

“This case is particularly serious because the illegal cartel behaviour meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society.”

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