Huw Jones

LONDON, (Reuters) – British legislators plan to examine the increase in Visa (NYSE 🙂 and Mastercard fees charged to businesses by Visa (NYSE :). The country’s payment regulator did not find any evidence that justified the increases. A parliamentary committee stated on Thursday.

The Treasury Select Committee of Parliament stated that the businesses, which account for over 99% in card transactions in Britain had raised the interchange fees and scheme paid by card issuers to the card companies.

Mel Stride (chair of the committee) stated in a statement that Visa and Mastercard are currently the dominant players in this market. He also said that it was vital that the market is regulated and competitive so businesses don’t have to pay ever-increasing service costs.

Visa and Mastercard did not immediately respond to our request for comment.

To be part of a payment network, businesses pay interchange fees and scheme fees. According to regulators, consumers are often subject to higher fees from merchants to card issuers.

The Payment Systems Regulator of Britain (PSR), stated in November that smaller companies were not able to use card services.

Stride was informed by it in a written communication on Thursday about its plans to propose “remedies” for rising scheme fees. They have more than doubled in the past two years.

According to the PSR, “Our analysis shows that substantial percentages of these rises were not explained in changes in the quantity, value or mixture of transactions.” The PSR stated that merchants have been engaged with since the beginning to show that their numbers have increased steadily.

Amazon.com (NASDAQ) announced in November that it will stop accepting payments for Visa cards in Britain starting in January due to increasing fees.

Graphic: PSR Interchange Fees Graphic- https://fingfx.thomsonreuters.com/gfx/mkt/klvykqbywvg/PSR%20Graphic%20on%20Interchange%20Fees.PNG

The interchange fees that British consumers pay to the European Union for their purchases grew last year, after the EU cap on British withdrawal at 2020’s end. However, fees for purchasing in Britain are still subject to UK regulations.

PSR stated that they were closely watching the increase in Visa and Mastercard’s cross-border interchange fees for October. But, said they had not seen significant cost increases.

The statement said that “Our work proposed will look more closely at why the recent increases have occurred and whether it indicates any themes, concerns, or warrants action by us.”

Stride stated that the Treasury committee would review the plans of the regulator at an April hearing.

EU attempts to stop Mastercard dominance are not working.