The Payment Systems Regulator (PSR) has published its provisional decision on remedies for the card-acquiring market review, following its initial consultation earlier this year.

Card-acquiring services are crucial to the UK economy because they enable merchants, like newsagents and supermarkets, to accept card payments. This means, every day, people can pay for goods they need, including groceries and clothing, by card. With UK credit and debit card payments totalling £884 billion, it’s important these services work well for everyone.

Earlier this year, the PSR consulted on four potential remedies to address concerns identified in its card-acquiring market review, which found the market doesn’t work well for merchants with annual card turnover below £50 million. Following all the responses the regulator received and engagement with stakeholders, the PSR is proposing three remedies:

  • Greater transparency: Summary boxes containing bespoke key price and non-price information for every merchant which can be used alongside new online quotation tools to help merchants compare prices and other service features more efficiently.
  • Greater engagement: Trigger messages will be sent from providers to merchants to prompt them to shop around, re-negotiate their contract or switch to get the best deal they can.
  • The ability to change providers easily: Contractual limits will be placed on Point of Sale (POS) terminal contracts, so merchants are not discouraged from searching for and switching providers. These will be a maximum duration of 18 months on POS terminal lease and rental contracts, and maximum one month notice after any renewal. 

The PSR intends to implement these remedies through Specific Directions given to the most significant providers of card-acquiring services to merchants.

Based on the feedback from its initial remedies consultation, some changes have been made. For example, the PSR will no longer propose direct measures to encourage Digital Comparison Tools (DCTs) for merchants, as the newly proposed online quotation tools have the potential to unlock opportunities and stimulate DCTs in the market without further regulatory intervention.

Kate Fitzgerald, Head of Policy (interim) at the PSR said: 

“Card acquiring services are important for the millions of people who pay by card and for the majority of UK businesses who accept cards.  It’s vital that this market works well for everyone. 

"These remedies encourage transparency, engagement and comparison to help promote competition in the card acquiring market and to protect merchants by helping them get value for money.”     

Next steps

The regulator is now seeking views from all stakeholders and interested parties on these latest proposals. The consultation closes on 10 August 2022, and the PSR plans to issue a final remedies notice later this year.