The Payment Systems Regulator (PSR) has published its third working paper as part of its card scheme and processing fees market review.  

It outlines recent changes to these fees and calls for views on the regulator’s emerging thinking around how Mastercard and Visa, the two largest card payment system operators in the UK, approach fee changes and what their approach may suggest about competition in the cards market.  

To accept card payments, businesses have to pay certain fees – called scheme and processing fees - which are charged by Mastercard and Visa. The PSR’s market review is important because these fees can affect the prices we all pay for the goods and services we buy.  

Today’s paper examines a sample of approximately 20 fee changes each between 2017 and 2021. The PSR believes that the fees considered in this paper are those that had the greatest impact on Mastercard and Visa’s revenue, or those that have changed most significantly for acquirers and issuers.  

The paper sets out the PSR’s emerging thinking. The regulator’s preliminary view is that the information it has gathered so far appears to show that:  

  • Most of the increase in scheme revenue the PSR looked at came from changes to mandatory fees. 
  • The schemes’ most frequently cited reason for setting a fee level was to reflect the value of their service.  
  • Competitive pressure does not appear to have prevented the schemes from increasing mandatory fees.  

The PSR is now seeking views on this working paper until 11 August.  

Once the regulator has completed its assessment of the market, it intends to publish its interim findings later this year.  


  1. Acquirers refer to organisations that process card payments for businesses. Issuers refers to the bank or payment service provider that issues someone with a card linked to their account.  
  2. In October, the PSR published final terms of reference for its market review of scheme and processing fees, including an ambitious timetable setting out the next stages of the PSR’s work.  
  3. This is one of a series of working papers which will be published during the course of the market review.  
  4. This working paper should be read alongside the final terms of reference and other working papers the PSR has published. Working papers do not form part of the PSR’s interim findings. The PSR is carrying forward its information-gathering and analysis work and will proceed to prepare its interim findings, which is currently scheduled for publication later this year. The interim findings will take into consideration the evidence obtained, responses to the working papers as well as other submissions made to us.