UK Regulator Tightens Oversight of Card Payment Pricing and Governance

Introduction

The UK’s Payment Systems Regulator (PSR) is strengthening its supervision of card payment pricing and governance in response to concerns that major card schemes — notably Visa and Mastercard — have increased scheme and processing fees without adequate transparency and competitive pressure. The regulator’s latest market review found that fees have risen substantially while merchants and acquirers receive limited clear information about how pricing is set, raising costs and creating barriers to more effective competition.

To tackle these issues, the PSR is consulting on new remedies aimed at boosting transparency, accountability, and evidence-based pricing decisions — key steps toward ensuring that UK card payments markets work better for businesses, consumers, and the economy.

Why This Change Matters

Card payments are central to the UK economy. Merchants of all sizes rely on debit, credit, and commercial card acceptance to support sales both in-store and online. However, the PSR’s review found that between 2017 and 2023, core scheme and processing fees charged by Visa and Mastercard increased by more than 25% in real terms — costs that are often passed on to merchants and consumers alike.

The review also revealed that information provided to acquirers and merchants about these fees is often incomplete or complex, making it difficult for businesses to compare pricing or negotiate more competitive terms. Without clearer insight, merchants can face hidden charges and limited choice — especially in markets with high card usage and limited alternative payment rails.

To address these concerns, the PSR is proposing two key regulatory remedies, outlined in its draft consultation directions:

1. Information Transparency and Complexity Remedy (ITC)

Schemes will be required to provide clear, actionable pricing information to acquirers, enabling them to understand, compare, and act on the costs associated with different card services. This enhanced transparency is designed to help merchants make better decisions and drive competitive outcomes.

2. Pricing Governance Remedy

The PSR will introduce standards to ensure that pricing decisions are evidence-based, helping the regulator and the market gain confidence in how fees are set. This will also support better oversight and governance across card scheme operations.

In addition, the PSR is advancing plans for regulatory financial reporting, which will give it access to enhanced data on card scheme profitability and fee structures — a vital component of monitoring and future policy decisions.

Expected Impact on Payments Ecosystem

These proposed changes have implications for multiple stakeholders across the UK payments landscape:

Merchants and Acquirers

• Better clarity on fee structures.
• Stronger leverage in negotiating pricing terms.
• Potential reductions in opaque charges that add to operational costs.

Card Schemes (Visa, Mastercard)

• Greater accountability in how pricing decisions are documented and justified.
• A need to demonstrate evidence-based governance in fee setting.
• Increased oversight that may influence future fee strategies.

Regulatory Landscape
The PSR’s actions align with broader UK regulatory trends aimed at boosting competition and transparency in financial services, including reviews of variable recurring payments (VRPs) and integration with the Financial Conduct Authority (FCA) as part of future payment regulatory consolidation.

With the consultation on draft directions set to conclude ahead of more detailed proposals in Spring 2026, businesses and industry groups have the opportunity to shape the final regulatory approach.

Conclusion

The UK’s Payment Systems Regulator is moving to tighten oversight of card payment pricing and governance — a response to rising fees, limited transparency, and the need for more competitive dynamics in the card payments market. By mandating clearer pricing information and evidence-based governance standards, the PSR aims to empower merchants and acquirers with better tools to navigate costs, while giving regulators deeper visibility into how fees are set.

As these proposals progress toward formal implementation, they have the potential to reshape the landscape for card acceptance in the UK — benefiting consumers, businesses, and the broader financial ecosystem alike.

#CardFees#CardPricing#PaymentsTransparencyfinancialregulationFintechRegulationPSRTheFinRateUKPayments