UK regulator fines Mastercard £31m over ‘cartel behaviour’
Mastercard is among five payments firms which have been accused of operating a cartel in the prepaid cards market.
The Payments Systems Regulator imposed fines totalling £33m against five companies – Mastercard, Allpay, Advanced Payment Solutions, Prepaid Financial Services and Sulion – which broke competition laws by agreeing not to compete or poach each other’s customers.
The regulator said that during its investigation all the firms admitted to breaking competition law and agreed to settlements.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour,” said Chris Hemsley, the Managing Director of the Payment Systems Regulator.
The regulator said the case was “particularly serious” because the companies provided local authorities with pre-paid cards to distribute welfare payments to vulnerable members of society, including people who were homeless, victims of domestic violence and asylum seekers.
“The illegal cartel behaviour meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society,” Hemsley continued.
In initial findings published last March the regulator said it would fine the companies for jointly coordinated their commercial behaviour to share the market.
According to an investigation for a short time in 2016 Mastercard was the sole funder of the National Prepaid Cards Network, an organisation which brought together public sector bodies such as local authorities which were interested in pre-paid cards with programme managers for one of the five providers.
The companies agreed target or poach each other’s public sector customers that were either already in contract or being provided services through a pilot programme.
A second cartel involved a separate arrangement between Advanced Payment Solutions and Prepaid Financial Services not to target each other’s public sector customers when a contract was up for renewal, including through a public tender.
Read more: Mastercard among five companies fined after engaging in ‘cartel behaviour’