Tackling Visa and Mastercard fees could take years, says UK regulator -Breaking
© Reuters. FILEPHOTO: This illustration, taken July 15, 2021 shows a credit card in front of the Visa logo. REUTERS/Dado Ruvic/Illustration
LONDON, (Reuters) – It may be many years before the card fees for global payment duo Mastercard and Visa can be capped to reduce costs for consumers and retailers, Britain’s payments regulator said Wednesday.
Chris Hemsley was the managing director for Payment Systems Regulator and came under intense pressure by parliament’s Treasury Select Committee in order to reduce card fees more quickly.
The so-called interbank fees, which Visa and Mastercard levy on merchants for purchases made from the European Union were increased in 2021 following the removal of a cap from effect in Britain.
The regulator informed the committee five months ago that, despite repeated requests, the reason for the increase in volume, value, mix, or transactional transactions was not possible.
Hemsley explained Wednesday to lawmakers that “at the moment, we don’t know why costs have changed.”
Mel Stride, the chair of the committee, and other legislators urged Hemsley not to slow down and put “the cap back on”.
I am also frustrated by this. Hemsley stated that there is no quick solution to the problem and added that it can take as long as four years for such investigations to be completed.
He said, “It will be a while.”
Hemsley explained that Visa and Mastercard make up about 90% of all payments to retail cards.
Charles Randell, the outgoing chairman of PSR, stated that the regulator must conduct its investigation thoroughly to reach “robust conclusions” in light of multi-national organizations with “enormous resources” such as Mastercard and Visa.
He stated that no other global regulator was facing the card companies the same way.
Visa and Mastercard did not immediately respond to our request for comment.
Hemsley denied retailer claims that they were “bamboozled” by Visa and Mastercard. He stated that next month more information would be published on the regulator’s investigation.
The EU also wanted to increase competition on a market that was dominated by the U.S., but it has had little success.