The United Kingdom’s Payment Systems Regulator (PSA) has imposed a total penalty of more than £33 million on five pre-paid card issuers: Mastercard, allpay, Advanced Payment Solutions, Prepaid Financial Services and Sulion, for forming a cartel and violating the country’s competition law.
Announced on Tuesday, the five companies previously agreed not to compete or poach each other’s clients in the British market.
Mastercard was fined the highest at £31.5 million, while Prepaid Financial Sevices, allpay and Advanced Payment Solutions have to pay £916,746, £28,553, and £755,419, respectively. Sulion has been slapped with a token amount of £572 in fines.
Forming a Cartel
All of these companies issued pre-paid cards that were used by the local authorities to distribute welfare payments among vulnerable members of society.
The regulator initiated its investigation against the cartel in October 2017 after a complaint by allpay. Additionally, the regulator carried out unannounced searches of some of the premises of the cartel participants.
The penalty came almost a year after the British regulator announced its provincial findings. Moreover, it highlighted that all of the five companies have admitted to breaking the law and agreed to settle.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero-tolerance for cartel behaviour. We will intervene and enforce the law strictly to ensure there is effective competition in payments markets,” said Chris Hemsley, the Managing Director of the Payment Systems Regulator.
“This case is particularly serious because 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.”
The United Kingdom’s Payment Systems Regulator (PSA) has imposed a total penalty of more than £33 million on five pre-paid card issuers: Mastercard, allpay, Advanced Payment Solutions, Prepaid Financial Services and Sulion, for forming a cartel and violating the country’s competition law.
Announced on Tuesday, the five companies previously agreed not to compete or poach each other’s clients in the British market.
Mastercard was fined the highest at £31.5 million, while Prepaid Financial Sevices, allpay and Advanced Payment Solutions have to pay £916,746, £28,553, and £755,419, respectively. Sulion has been slapped with a token amount of £572 in fines.
Forming a Cartel
All of these companies issued pre-paid cards that were used by the local authorities to distribute welfare payments among vulnerable members of society.
The regulator initiated its investigation against the cartel in October 2017 after a complaint by allpay. Additionally, the regulator carried out unannounced searches of some of the premises of the cartel participants.
The penalty came almost a year after the British regulator announced its provincial findings. Moreover, it highlighted that all of the five companies have admitted to breaking the law and agreed to settle.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero-tolerance for cartel behaviour. We will intervene and enforce the law strictly to ensure there is effective competition in payments markets,” said Chris Hemsley, the Managing Director of the Payment Systems Regulator.
“This case is particularly serious because 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.”
Source: https://www.financemagnates.com/fintech/news/british-payments-regulator-fines-mastercard-and-4-others-33m/