The Payments Systems Regulator (PSR) has charged five payments companies including Mastercard fines totalling £33 million for cartel behaviour in the prepaid cards market.

After concluding its investigation into two cartels in the prepaid cards market, the UK payments regulator found that five parties including Mastercard, allpay, Advances Payment Solutions (APS), Prepaid Financial Services (PFS) and Sulion had broken competition law by agreeing not to compete or poach each other’s customers in prepaid markets in Great Britain.

The pre-paid cards in question were used by local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers, the PSR said.

In its infringement decision issued today, the PSR imposed fines totalling more than £33 million for each party’s participation in the illegal conduct.

The fines for each company include: Mastercard: £31,560,062; PFS: £916,746; allpay: £28,553; APS: £755,419 and Sulion: £572.

This decision concludes the PSR’s investigation that was opened in October 2017 following a complaint made by allpay about one of the infringements.

In February 2018, the PSR carried out unannounced searches at the premises of some of the parties. The PSR announced its provisional findings in the case in March 2021.

During the course of the investigation, all parties settled and admitted breaking the law, the PSR said.

Chris Hemsley, managing director of the Payment Systems Regulator, commented: “This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour. “We will intervene and enforce the law strictly to ensure there is effective competition in payments markets.”

He added: “This case is particularly serious because the illegal cartel behaviour meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society.”

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