Payment
Systems Regulator imposes £33 million fine for card payment scheme market
sharing
The
Payment Systems Regulator (PSR) has imposed penalties of £33 million on Mastercard,
allpay, APS, PFS and Sulion for agreeing not to compete with each other.
The
PSR’s investigation started in 2017 and concerned pre-paid cards used by local
authorities. These cards are used to distribute welfare payments to vulnerable
consumers, including the homeless and victims of domestic abuse.
Two
market sharing cartels were identified by the PSR. The first was an arrangement for the National
Prepaid Cards Network allowing public sector bodies to coordinate the prepaid
card acquisition process. The parties agreed
not to target or poach each other's public sector customers and to exclusively
allocate customers who were not signed up.
The arrangements lasted from 2012 to 2018.
The
second cartel was between APS and PFS covering the period 2014 to 2016. The PSR found that APS and PFS would not
target each other's customers at contract renewal.
Mastercard
received the highest individual fine of £31.5 million. However, this fine is quite low in relative
terms taking into account the entity’s turnover and the fact that one of the
violations lasted for 6 years.
PFS
applied for leniency to the Competition and Markets Authority in 2018, and received
a reduction in the fine to £900,000.
Mastercard,
allpay and PFS received a 20% discount for entering into a settlement prior to
the issue of the PSR’s statement of objections.
APS
and Sulion received a 10% discount for settling after the statement of
objections.
When
the final decision is released this may be instructive in terms of the PSR’s
approach to calculation of the fines.
After
over four years of investigation the decision represents a landmark for the PSR
as its first competition law infringement decision culminating in a fine.
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