The Payment Systems Regulator in the UK takes a closer look at card schemes in the country. More specifically, there are concerns over the current fees and how they may affect merchants and consumers. Additionally, card schemes need to figure out ways to give merchants a better deal, even if that includes alternative payment solutions.
Card Schemes Face Necessary Scrutiny
The recent Amazon-Visa spat has strongly emphasized how card schemes fees affect many people. Although that matter has been resolved, the UK’s PSR intends to dive deeper into the matter. More specifically, they have raised strong concerns over the current high card fees. Merchants need to pay Visa and Mastercard an arm and a leg to process transactions, and the rates keep going up.
Per the PSR, there is now an official investigation on the table to determine the levels and structure of fees from both card schemes. Moreover, that information will shape the approach of the PSR regarding these matters. Short-term measures remain a possibility, although a long-term approach is necessary too. Although not necessarily sustainable, putting a price cap on card scheme fees would be beneficial.
PSR MD Chris Hemsley adds:
“We’ll continue to act swiftly and decisively to make sure that consumers and businesses are protected, and to promote innovation and competition where it counts.”
Another approach is to emphasize alternatives to popular card schemes for merchants. The PSR believes it can offer credible solutions, assuming the commercial incentives for banks, intermediaries, and merchants align. Guidelines for crypto assets, stablecoins, and CBDCs are also on the agenda for the PSR.