On 30 June 2023, the Payment Systems Regulator (PSR) published a working paper on a market review into card scheme and processing fees: recent changes to scheme and processing fees.

This working paper is the third published in the course of the PSR’s Scheme and Processing fees market review. The purpose of these working papers is to set out the PSR’s methodology, analysis and emerging thinking.

This working paper outlines recent changes to card scheme and processing fees and calls for views on the regulator’s emerging thinking around how MasterCard and Visa approach fee changes and what their approach may suggest about competition in the cards market.

This working paper examines a sample of around 20 fee changes each between 2017 and 2021. The PSR believes that the fees considered in this paper are those that had the greatest impact on MasterCard and Visa’s revenue, or those that have changed most significantly for acquirers and issuers.

The regulator’s preliminary view is that the information it has gathered so far appears to demonstrate that:

• Most of the increase in scheme revenue the PSR looked at came from changes to mandatory fees.
• The scheme’s most frequently cited reason for setting a fee level was to reflect the value of their service.
• Competitive pressure does not appear to have prevented the schemes from increasing mandatory fees.

The deadline for comments on this working paper is 11 August 2023.