UK Payments Regulator tightens scrutiny of Mastercard and Visa

The UK’s Payment Systems Regulator (PSR) is preparing to intensify oversight of card payment economics by proposing new financial reporting requirements for Mastercard and Visa.

PSR tightens scrutiny of Mastercard and Visa

The move marks the latest phase in the regulator’s broader investigation into rising card scheme fees and the competitive dynamics of the UK payments market.

Under the proposals, both card networks would be required to provide detailed profitability reporting relating specifically to their UK operations. The PSR believes the measures are necessary after its market review uncovered evidence suggesting that scheme profit margins may be materially higher than would normally be expected in a genuinely competitive environment.

Growing Pressure Over Rising Scheme Fees

The regulator has become increasingly concerned by sustained increases in scheme and processing fees charged to acquirers and merchants. According to the PSR, businesses continue to face limited transparency over the true structure and justification of these costs, despite the central role card payments now play in the UK economy.

The proposed regulatory financial reporting framework would compel the schemes to submit detailed profit and loss accounts for their UK card businesses, alongside supporting contextual information designed to help regulators understand the underlying drivers of profitability.

David Geale, managing director of the PSR, stated that fee increases observed in recent years have not been clearly linked to rising operational costs or investment requirements. The regulator therefore wants stronger visibility into the financial mechanics underpinning the card schemes’ UK activities.

A Wider Debate Over Market Power

The consultation also reflects broader international concerns surrounding the market dominance of Mastercard and Visa. Together, the two networks process the overwhelming majority of card transactions in the UK and across much of Europe, giving them significant pricing power over merchants and payment service providers.

While the PSR has stopped short of proposing direct price controls, enhanced financial disclosure could provide the foundation for tougher intervention if the regulator concludes that competition is failing to deliver fair outcomes for businesses and consumers.

The PSR is expected to publish final decisions on related transparency and pricing governance remedies later this summer.