The UK's Payment Systems Regulator has imposed fines totalling £33 million on five firms, including Mastercard, for violation of anti-trust laws in the issue of prepaid cards to vulnerable people on welfare benefits.
The penalties against the five firms - Mastercard, allpay, Advanced Payment Solutions, Prepaid Financial Services, and Sulion - follows a five-year investigatio into allegations that the companies operated an illegal cartel by agreeing not to compete or poach each other’s customers.
Mastercard bore the brunt of the financial penalty, incurring a £31,560,062 fine. PFS was slapped with a £916,746 fine, allpay hit £28,553, APS was stung with a £755,419 bill and Sulion was rapped on the knuckles for a limited role, incurring a £572 fine.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour,” comments Chris Hemsley, managing director of the Payment Systems Regulator. “We will intervene and enforce the law strictly to ensure there is effective competition in payments markets. 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.”