Mastercard, Four Other Firms To Pay £33 Million For Competition Law Violation

Five payment firms, including Mastercard, have been fined £33 million for competition law violations. The Payment System Regulator found the companies guilty of operating illegal cartels when offering prepaid cards for local authorities.

The regulator noted that by refusing to compete with each other, the card providers may have denied the consumers access to cheaper products. Also, it may have caused people to miss out on better quality services.

The Cartel Carried Out Its Activities Between 2012 And 2018

The cards were used to send welfare payments to vulnerable people, such as asylum seekers, victims of domestic violence, and the homeless. Emergency funds or benefits payments could be uploaded to the card, allowing the user to have access without necessarily having an account with a bank.

Investigation into the operations of these companies was launched in October 2017, but raids on some of the companies were carried out in February 2018.

According to the investigation, five of the affected companies – Mastercard, Sulion, Prepaid Financial Services (PFS), Advanced Payment Solutions (APS), and Allpay – were involved in the cartel between 2012 and 2018. However, some of the companies joined the cartel much later.

All Parties Have Admitted Their Wrongdoings

The five firms are arranged so that the program managers do not peach or target each other’s customers. PFS ad APS formed a second cartel between 2014 and 2016, with both parties deciding not to peach each other’s customers when a contract is nearing renewal.

The regulator stated that at the time of the investigation, all the parties admitted their wrongdoing. Mastercard received the highest amount of fine of £31,560,062, with the least fine charged to Sullion. Alipay was fined £28,583, APS was fined £755,419, and PFS was fined £916,746.

Managing Director of PSR, Chris Hemsley, stated that the issue was a very serious one because the activities of the cartel reduced the choice for local authorities and shrunk competition.

He added that the fines will “send a clear message that the PSR has zero-tolerance for cartel behavior.” Despite the rule-breaking the regulator discovered, the vulnerable card recipients are still going to receive their full benefits. However, the providers do not have any incentives to improve their services.

Copyright © 2022. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.