On Tuesday, the UK’s payments regulator fined payments titan Mastercard alongside four other payments companies the sum of 33 million pounds, the equivalent of $45.01 million. The allegations surrounded cartel behaviour involving prepaid cards that were issued to vulnerable people on welfare benefits. While Mastercard received the biggest fine out of the five companies convicted of being guilty of the allegations, the remaining four namely Allpay, Advanced Payment Solution, Prepaid Financial Services and Sulion received a very minute sum of the total fine. Microsoft was fined 31.56 million pounds, about $43.04 million out of the total 33 million pounds.
According to what the UK regulator known as the Payment Systems Regulator (PSR), the five payments companies broke competition law as they agreed not to compete or poach each other’s customers on pre-paid cards offered by local authorities to hand out welfare payments to vulnerable people. This means that the recipients of the cards (the homeless, domestic abuse victims, asylum seekers, etc) could have missed out from benefitting from cheaper products or products that offered better quality.
The regulator first announced in March last year that it was going to fine five companies it found guilty of the aforementioned allegations. The regulator subsequently launched an investigation and announced today, alongside its decision, that it has brought its investigation to a conclusion.
Chris Hemsley, the Managing Director of the Payments Systems Regulator said that “This investigation and the significant fines we have imposed send a clear message that the PSR has zero-tolerance for cartel behaviour”, adding that during the course of the investigation, Mastercard alongside its four co-offenders settled and admitted that they broke the law. The regulator seemed very fulfilled by the outcome of the investigation and how the offenders responded.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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