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The PSR provisionally finds five companies broke the law by engaging in cartel behaviour in the pre-paid cards market

Three out of five parties admit liability for breaching competition rules and agree to pay maximum penalties totalling over £32 million as part of settlement

The Payment Systems Regulator (PSR) has issued a Statement of Objections(1) that alleges that Mastercard(2), allpay(3), APS(4), PFS(5) and Sulion(6) engaged in anti-competitive behaviour by agreeing not to compete or poach each other’s clients.

The case relates to pre-paid cards that are used by local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.

In its Statement of Objections, sent to the five parties today, the PSR alleges that there were two infringements of the Competition Act 1998 that took the form of market sharing/customer allocation:

  • One lasting six years (between 2012 and 2018) and involving all five parties(7).
  • The other lasting two years (between 2014 and 2016) and involving APS and PFS.

The Statement of Objections sets out the PSR’s case against the parties but is not the end of the investigation and the parties now have the opportunity to make representations on the provisional findings.

In February 2021 Mastercard, allpay and PFS agreed to settle(8) with the PSR and admitted that they took part in the alleged anticompetitive arrangement(s). Should the PSR ultimately conclude that there have been infringements, Mastercard, allpay and PFS have agreed to pay maximum fines totalling over £32million(9).

Chris Hemsley, Managing Director of the Payment Systems Regulator, commented:

“Pre-paid card services, like these, can provide significant benefits to local authorities as one way to make welfare payments to some of the most vulnerable people in society.

“By colluding in this way, we consider the parties were acting as a cartel. Because of the reduced competition local authorities may have been missing out on an alternative supplier or products that were either cheaper or better suited to both their needs and the needs of those using the pre-paid cards.

“Collusion in payments is absolutely unacceptable. Where we see it happening, we will take action, stop it, and seek to impose significant penalties.”

What the PSR found in its investigation

The PSR first started work on this investigation in October 2017. In February 2018, the PSR carried out unannounced searches at a number of premises.

In its Statement of Objections, the PSR provisionally concludes that the parties coordinated their commercial behaviour to share the market and allocate customers in relation to the supply of prepaid card services used for welfare disbursements to public bodies in England, Scotland and Wales. The pre-paid cards operated on just one card scheme: Mastercard.

Other than for a short period in 2016, Mastercard sponsored and wholly funded the National Prepaid Cards Network (Network), whose members were the public sector bodies potentially interested in prepaid cards (local authorities, etc) and the Mastercard programme managers (PMs). The Network was central to one of the cartels investigated by the PSR, which took place between 2012 and 2018.

The PSR has provisionally found that during this period the five parties arranged for the PMs which were members of the Network not to target or poach each other’s public sector customers that were in contract with other Network PM or were being provided services through a pilot programme by other Network PM. In the early days of the Network, the parties also colluded to exclusively allocate the leads from Network promotional events between the Network PMs.

In addition, the PSR has provisionally found that between 2014 and 2016 APS and PFS arranged not to target each other’s public sector customers when a contract was up for renewal, including through a public tender.

As a consequence of the alleged collusion, public bodies were limited in the choice of suppliers of pre-paid cards services, and potentially deprived of lower prices and better quality for those services.


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About the PSR:

The PSR is UK’s independent regulator of payment systems and is a concurrent competition authority. The PSR has a range of strong regulatory and competition powers and can:

  • give directions to take action and set standards
  • impose requirements regarding system rules
  • require operators to provide direct access to payment systems
  • act where it sees anti-competitive behaviour, alongside the Competition & Markets Authority
  • require Payment Systems Providers (PSPs) to provide indirect access to smaller PSPs
  • amend agreements relating to payment systems, including fees and charges
  • investigate behaviour which isn’t consistent with our directions


  1. A statement of objections gives parties notice of a proposed infringement decision under the Competition Act 1998. It is a provisional decision only and does not necessarily lead to an infringement. Parties have the opportunity to make written and oral representations on the matters set out in the statement of objections. The statement of objections will not be published.
  2. Mastercard is a payment system operator active worldwide, including in the UK. It operates a four-party card scheme “whereby a card payment by a consumer to a merchant is facilitated by a number of intermediary parties, including an issuer and an acquirer”. Mastercard licences its brand to issuers and acquirers who meet the requirements of scheme membership. APS, PFS and allpay are all licensed issuers of Mastercard.
  3. allpay is an electronic money institution (EMI) as well as a programme manager (PM) and card issuer providing, among other things, prepaid card services to the public sector. allpay is a licensed issuer of Mastercard.
  4. APS is an EMI as well as a PM and card issuer having provided, among other things, prepaid card services to the public sector until 2016 as a licensed issuer of Mastercard.
  5. Prepaid Financial Services (PFS) Limited is an EMI as well as a PM and card issuer providing, among other things, prepaid card services to the public sector. Prepaid Financial Services limited is a licensed issuer of Mastercard.
  6. Sulion’s key function was to provide services to Mastercard for which Sulion was remunerated. Its mandate was to promote the use of pre-paid cards in the public sector. This was achieved through the setting up of the National Prepaid Cards Network (Network), whose members were the public sector bodies potentially interested in prepaid cards (local authorities, etc) and the Mastercard PMs.
  7. The alleged infringement lasted six years; however, some parties participated in the infringement for shorter periods of time.
  8. The PSR may settle the case with any party to an investigation if the party admits that it has breached competition law, agrees to pay a maximum penalty and agrees to a streamlined administrative procedure for the remainder of the investigation. In return, the PSR applies a settlement discount to the penalty that would otherwise have been imposed (the discount can go up to 20% if settlement is reached before the issuing of the SO).
  9. The investigation is ongoing. The PSR will consider any representations it receives from the parties before any final formal decision is taken as to whether competition law has in fact been infringed.