The UK’s Payment Systems Regulator (PSR) has found that Mastercard, alongside four other parties, broke competition law by agreeing not to compete with one another in the prepaid cards market.
The PSR, which regulates the £81 trillion payment systems industry in the UK, has fined the five companies — Mastercard, allpay, Advanced Payment Solutions (APS), Prepaid Financial Services (PFS) and Sulion — more than £33 million in total.
The regulator says all five parties agreed to not poach or target each other’s customers while acting as part of the National Prepaid Cards Network, effectively forming a market sharing cartel.
The National Prepaid Cards Network brought together public sector bodies such as local authorities and housing associations with prepaid card companies to distribute welfare payments.
The PSR says the parties also colluded to allocate between them potential new public sector customer contacts.
A second cartel involved a separate arrangement between APS and PFS not to target each other’s public sector customers when a contract was up for renewal.
The PSR opened its investigation in October 2017, with unannounced searches of premises of some of the parties in February 2018.
The regulator says during the course of the investigation, all parties settled and admitted breaking the law.
Mastercard was fined £31,560,062. PFS and APS were fined £916,746 and £755,419, respectively. allpay and Sulion were fined £28,553 and £572, respectively.
PSR managing director Chris Hemsley says the case was particularly serious because the actions of the companies reduced competition and choice for local authorities, which means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour,” Hemsley adds.
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