The UK’s Payment Systems Regulator (PSR) has come under fire from retailers after proposing what critics call inadequate measures to address soaring card scheme fees charged by Visa and Mastercard. The regulator’s consultation paper, published this week, focuses primarily on increasing transparency rather than implementing direct price controls, despite finding that the card networks raised core fees by over 25% in real terms between 2017-2023 – costing UK businesses an extra £170 million annually.
The proposed remedies would require Visa and Mastercard to:
- Provide clearer fee information to merchants and acquirers
- Strengthen pricing governance procedures
- Submit regular regulatory reports to the PSR
David Geale, PSR Managing Director, defended the approach: “Improving transparency will enable businesses to make informed choices… These steps will ensure we can scrutinize card schemes and act quickly if further action is needed.”
However, the British Retail Consortium (BRC) has slammed the proposals as woefully insufficient. Chris Owen, the retail lobby group’s payments advisor, accused the PSR of a “failure of vision,” arguing: “The PSR must mandate pricing interventions and long-term price caps. Without this, card schemes will continue exploiting their dominance, with costs ultimately passed to consumers.”
The controversy highlights growing tensions between merchants and payment networks, with retailers demanding tougher action after years of fee increases. While the PSR emphasizes its incremental approach allows for future interventions, critics argue the regulator is missing a critical opportunity to fundamentally reform what they view as an anti-competitive market structure..