The UK’s Payment Systems Regulator (PSR) has reportedly put the card schemes on notice that it is looking into their fees and how to assist merchants with entering better deals, including by promoting the alternative of account-to-account payments.
While sharing its plans for 2022/23, the PSR has again expressed concerns regarding the “high card fees” that merchants have been paying to Visa and Mastercard, adding that they have increased considerably during the past few years.
The regulator stated that it has now sent out information requests regarding the levels and structure of such fees and will be proceeding based on the details obtained.
While considering the long-term approach, it may introduce short-term measures, such as “price caps on scheme fees or cross-border interchange fees”.
The PSR is also focused on eliminating barriers or challenges to the uptake of A2A retail payments, which it noted may offer a “credible” and viable alternative to the existing card schemes.
The regulator said it will investigate whether the commercial incentives for banking institutions, intermediaries and merchants are there to support and enable greater use of A2A payments and what it may do to boost uptake and encourage competition with cards.
The PSR is also currently working with the CMA, FCA and Treasury on the future of Open Banking guidelines, which will serve a key role in A2A payments uptake.
The regulator also mentioned that it would work cooperatively with other agencies in order to ensure consumers have access to cash and to create guidelines and regulation on the crypto-assets, stablecoins and CBDCs (central bank digital currencies).
It is also currently working to address the growing threat of APP fraud.
Chris Hemsley, MD, PSR, stated:
“We’ll continue to act swiftly and decisively to make sure that consumers and businesses are protected, and to promote innovation and competition where it counts.”