London (Reuters) – The UK’s payment systems regulator (PSR) will look at the fees Visa (NYSE:V) and Mastercard (NYSE:MA), two U.S. companies that handle 99 percent of debit and credit card payments in the UK, charge for their cards twice.
The PSR’s announcement on Tuesday came after lawmakers put a lot of pressure on the agency to start full market reviews to deal with card fees that retailers pay and usually pass on to customers.
The PSR’s head of strategy, Natalie Timan, said, “We want to know if card payments work well and make sure that merchants and, in the end, consumers get a good deal.”
Visa and MasterCard had no immediate comment.
The first review will look into why the cross-border interchange fee that MasterCard and Visa charged retailers for consumer purchases made by phone or online in the European Union went up by five times after Brexit. This is what the watchdog said.
The PSR had already said that preliminary inquiries had not been able to find a reason for the increase based on the number, value, or mix of transactions.
An EU agreement had put a limit on the fee, but after Britain left the EU, that limit was no longer in place.
The PSR said that it wants to know why these prices are going up and if this is a sign that the market is not working well.
In the second review, fees for services that help stores accept card payments are looked at.
Drafts of the reviews’ terms of reference are out for public comment until August 2.
Last month, the watchdog told lawmakers that it could take years to finish a review and make real changes.
