A keynote address was delivered by the Payment System Regulator’s Managing Director, Chris Hemsley, at the PayExpo Payments Leaders’ Summit on 5th October which contained some very welcome comments, including:

“Our work on card acquiring has set out analysis that suggests that scheme fees paid to Mastercard and Visa approximately doubled between 2014 and 2018. Our conclusions on this point will be published shortly.”

“…we have seen recent announcements of increases in certain card fees – focused on cross-border transactions – as previous regulatory constraints have been removed, as the UK left the European Union. However, the absence of specific regulatory caps is not itself sufficient reason to increase particular fees, particularly if these increases are not obviously linked to costs.”

“A viable alternative to card schemes in retail payments would mean a more competitive market that requires less regulatory intervention in the longer term. But in the shorter term we might still intervene, including if scheme fees and interchange fees continue to rise unchecked.”

The increases in cross-border interchange fees have given the PSR an opportunity to underline the failings of the status quo. Chris Hemsley’s statement is in danger of implying that the PSR has accepted the current Mastercard and Visa plans, however this is the first time in the history of the PSR that public indication has been made that the regulator could intervene of on card fees. The BRC will be watching developments closely.