PSR issues final decision and takes action on card-acquiring market
What does the final decision cover?
In January this year, we consulted on a package of remedies to help businesses, and therefore also consumers, get the best deal possible; we published a provisional decision on these remedies in June. This final decision now sets out what we expect providers to do to remedy the harms identified in our market review.
We set out the final remedies which we are introducing, specifically:
- Summary boxes containing bespoke key price and non-price information to be sent individually to each business and shown prominently in their online account. The summary box can be used alongside new online quotation tools to help businesses compare prices and other service features more efficiently.
- Online Quotation Tool using the information provided in the summary boxes to make comparisons with different providers online.
- Trigger messages to prompt businesses to shop around and/or switch. Messages will be sent by providers of card-acquiring services to businesses and shown prominently in their online accounts.
- A maximum duration of 18 months for Point of Sale (POS) terminal lease and rental contracts with a rolling monthly contract thereafter to prevent businesses from being locked into length contracts over several years.
Alongside the final decision we are publishing:
- Our Cost Benefit Analysis of the remedies
- The Specific Directions to give effect to these remedies
- Guidance on implementation of the summary information box and trigger messages
- A summary of our online testing of the disclosure remedies, i.e. the summary information box and trigger messages
Together, we consider that the final package of remedies will be effective in addressing address the features of concern identified in our card-acquiring market review. This is based on the evidence and feedback we received during the last year from regulators who have implemented similar remedies, stakeholder feedback and the market testing that we commissioned.
Why Does This Matter?
Card-acquiring services are critical to the UK economy. Every time somebody makes a card payment – for example, when buying their weekly groceries – the business uses card-acquiring services to accept the payment.
We want to make sure that the features of concern that we identified in the card-acquiring market review, such as a lack of transparency, over-pricing and lengthy contracts for the leasing of POS terminal card readers, are tackled allowing businesses to shop around and make informed choices. This will in turn see businesses getting a better deal, reducing their costs and seeing them receive a higher level of service.
The 14 directed firms are required to implement the remedy around POS terminal contracts from January 2023, and the two remedies around trigger messages and summary boxes from July 2023. The ISOs of the directed firms should ensure they are compliant with the requirements as set out in the relevant directions.
The PSR will monitor the firms’ compliance with the Directions and the impact of the remedies to determine whether any further action is required.