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    Home » UK’s PSR reveals card scheme market struggles to deliver value
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    UK’s PSR reveals card scheme market struggles to deliver value

    By Fiona XuMarch 10, 2025No Comments2 Mins Read
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    • The UK’s Payment Systems Regulator (PSR) reports that Mastercard and Visa have raised card processing fees by over 25% since 2017, costing businesses £170 million more annually.
    • The PSR highlights a lack of transparency and competition in the card scheme market, leading to higher costs for merchants and consumers.

    What happened: UK regulator flags card fee issues

    The UK’s Payment Systems Regulator (PSR) recently released a report indicating that the current market for card scheme and processing services is not functioning effectively. Between 2017 and 2023, Mastercard and Visa increased their core fees by over 25% in real terms, costing UK businesses at least £170 million more annually.

    The PSR found that these payment schemes fail to provide clear and detailed information to acquirers and merchants, leading to higher costs and hindering effective negotiations. The regulator also noted that Mastercard and Visa face ineffective competitive pressures, resulting in substantial fee increases without clear justification based on cost analysis or innovation.

    Also read: UK watchdogs probe competitiveness of big tech’s digital wallets
    Also read: UK regulators to scrutinise Big Tech’s digital wallets

    Why this is important

    This finding is significant as it underscores a broader issue within the payments industry, where a lack of competition can lead to inflated costs for businesses and, ultimately, consumers.

    The PSR’s report highlights a critical gap in transparency in the card processing market, which can stifle innovation and investment opportunities. With the UK being a leader in adopting digital payment technologies, these challenges may hinder future advancements.

    Moreover, the report aligns with ongoing discussions about the need for regulatory scrutiny in the fintech sector. Other stories in the industry have spotlighted similar concerns, such as rising transaction fees and the monopolistic tendencies of major payment providers.

    This situation affects not only merchants but also consumers, who may face increased prices as businesses pass on costs. As the PSR prepares to consult on potential remedies, the outcome could reshape the landscape of payment processing, ensuring a more competitive environment that benefits all stakeholders. This is a crucial moment for the sector, with implications for how payments are managed in the future, making it essential for readers to stay informed.

    card fees Payment Systems Regulator
    Fiona Xu

    Fiona Xu is an intern reporter at BTW Media, having studied Media Management at Hong Kong Baptist University. She specialises in tech reporting and investigative journalism. Contact her at f.xu@btw.media.

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