The Payment System Regulator (PSR) has published a consultation outlining proposed remedies to address concerns in the card scheme and processing fees market, following findings that the sector is "not working well for businesses and ultimately consumers."

The regulator's proposals focus on improving transparency and accountability, requiring Mastercard and Visa to provide clearer information on fees to merchants and acquirers, implement better pricing governance, submit regulatory financial reports, and publish scheme information.

David Geale, managing director of the PSR, said: "The proposed remedies we have set out today are a clear way to address the findings in our final report that this market is not working well for businesses and ultimately consumers. Improving transparency will enable businesses to make informed choices about the card payment services they receive."

The PSR's market review found that between 2017 and 2023, Visa and Mastercard increased their core scheme and processing fees by more than 25 per cent in real terms, adding at least £170 million per year in costs to UK businesses. The regulator noted these costs are typically passed on to consumers or result in reduced business investment.

However, the British Retail Consortium (BRC) has criticised the proposals as insufficient. Chris Owen, payments policy advisor at the BRC, said: "Today's consultation represents a failure of vision by the PSR. Their proposed remedies fall well short of the robust measures needed to tackle the harms that have arisen from the dominance of the card scheme operators."

The BRC is calling for pricing interventions and a longer-term price cap to meaningfully lower fees. "Retailers have long been weighed down by the high cost of card payments, and the PSR has found enduring competition problems and inefficiencies that cause serious harm to the retail market," Owen added.

The PSR's consultation is open for responses until 28 May 2025, after which the regulator will decide whether to proceed with the remedies and issue a final consultation on the specific proposed package.

Card payments are described as "critical to the smooth running of the UK economy," with the PSR stating that boosting competition in this area is central to its strategy and would support economic growth.

The PSR is set to be absorbed into the FCA later in 2025, following an announcement from the government that it is set to streamline the UK's financial regulation.

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