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• Mastercard and Visa account for 90% of retail card payments, showing that market is not working correctly, payment regulator’s MD says
• Investigations can take up to four years to fully conclude
UK payments regulator on Wednesday said it could take years before card fees from the two global payments giants, Mastercard Inc (NYSE: MA) and Visa Inc (NYSE: V), can be capped again to cut costs for retailers and consumers.
Last year, the payments duo increased the so-called interchange fees on retailers for British consumers purchasing from the European Union.
Although the EU has a fees cap, the limit ceased to apply in Britain following its departure from the bloc.
“At the moment, we don’t have a good explanation as to why costs have changed,” Chris Hemsley, the managing director of the Payment Systems Regulator, told parliament’s Treasury Select Committee.
Earlier this year, the regulator told the committee that despite requests for information, the hike could not be justified.
“I am frustrated about this as well. There isn’t a very quick fix to this issue,” Hemsley said, adding that such investigations can take up to four years to fully conclude.
Mastercard and Visa account for around 90% of retail card payments, a sign the market is not working correctly, Hemsley said.
PSR’s outgoing chair Charles Randell said the payments regulator must carefully complete its inquiry to ensure “robust” conclusions in the face of “enormous, well-resourced multi-national organisations” like the payment duo.
Hemsley, who dismissed retailer accusations of being “bamboozled” by Visa and Mastercard, said the regulator would publish more details on its investigation next month.
Picture Credit: Fox Business
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