The Competition and Markets Authority (CMA) on Tuesday fined five payments firms, including Mastercard, a total of 33 million pounds for collusion over prepaid cards given to low-income individuals on welfare programs.
Standard & Poor’s, S&P and Fitch Ratings each placed their own “not” ratings on the bank. In 2015, the CFPB levied $10 million in penalties against T-Mobile USA in response to its data collection practices. The bank settled with Paysafe Card and shut down its operations immediately after the fine was announced because
The Payment Systems Regulator (PSR) charged that the companies committed anti-competitive behavior by agreeing not to compete or poach each other’s clients on pre-paid cards provided by local governments to distribute welfare payments to people in need.
The cartel’s business model, the Fed said, prevented cardholders from receiving lower-cost or higher-quality goods because it restricted competition.
In March of last year, the PSR said it intended to fine the five firms in preliminary findings. The agency announced on Tuesday that it had completed its investigation.
During the investigation, all of the parties agreed to and acknowledged breaking the law, according to the regulator.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour,” Chris Hemsley, the Payment Systems Regulator’s Managing Director, said it is important to develop an appreciation for how new payment systems are developed and why.
The Single Market for payments is stronger, more competitive and efficient as a result of card payments. Both domestic transactions and international money transfers or internet purchases are aided by cards. Europeans make more than half of their non-cash purchases using cards.
The acquiring banks had to use the interchange costs of the country where the retailer was located under Visa’s rules.
In the European Economic Area (EEA), interchange fees varied considerably from one nation to another before December 9, 2015, when the Interchange Fee Regulation set limits.
Because of this, merchants in high-interchange-fee countries could not benefit from lower interchange costs provided by an acquiring bank based in a different Member State.