On 21 June 2022, the Payment Systems Regulator (PSR) set out terms of reference for its plans to carry out two market reviews focusing on card fees. The terms of reference provide that, the reviews will focus on MasterCard and Visa, as these two card payment system operators account for 99% of debit and credit card payments in the UK.

The terms of reference explain that the two reviews will look at the following:

  • Card scheme and processing fees: This review is being carried out given that the PSR’s card-acquiring market review (CAMR) found that the fees paid by acquirers has increased significantly from 2014 to 2018 and, according to stakeholders, has continued to increase since then. The PSR wants to understand whether the markets in connection with scheme and processing fees are working well. This market review will examine the levels, structure and types of scheme and processing fees, and builds on the PSR’s CAMR findings.
  • Cross border interchange fees: Cross-border interchange fees have also seen an increase in the last year, affecting fees for certain card transactions between the UK and the EEA, where the cardholder is not present (such as payments made by phone or online). Since the UK left the EU, Visa and MasterCard have increased these fees five fold. The PSR wants to understand the rationale behind these increases and whether they are an indication that the market is not working well.

The PSR is looking for feedback on the terms of reference, particularly as regards the proposed scope and approach of the reviews. The deadline for providing feedback is 2 August 2022.