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Credit card company Mastercard has been fined 31.56 million pounds (37.75 million euros) in the UK for entering into cartel agreements with four other companies. The UK regulator for payment systems (PSR) announced this on Tuesday.
The case revolves around prepaid credit cards that local governments use to provide benefits to people in vulnerable situations, such as homeless people and asylum seekers. This system is supported by Mastercard.
But between 2012 and 2018, Mastercard, three Mastercard-licensed card issuers – Allpay, Advanced Payment Solutions and Prepaid Financial Services – and financial services provider Sulion abused the system. They agreed not to approach each other or try to poach each other’s customers in the public sector.
In the PSR examination, the companies involved admitted that they had violated the law. The regulator has now imposed fines on the five companies totaling £33 million. The majority, £31.56 million, was covered by Mastercard.
“This case is very serious because illegal cartels lead to reduced competition and choice for local authorities,” said PSR chief executive Chris Hemsley. “This means they may be missing out on cheaper or better products for the most vulnerable groups in society.”
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