Introduction
The Payment Services Regulator (PSR) issued its first decision enforcing competition law in the payments sector on 31st March 2021. The PSR is a concurrent competition regulator for the payments sector along with the Competition & Markets Authority (CMA). This is the first time the PSR it has used its competition powers since it became a concurrent competition regulator in 2015.
The PSR provisionally decided that five parties were guilty of taking part in a cartel in relation to pre-paid cards used by local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers contrary to Chapter I of Competition Act 1998. The PSR alleged that Mastercard, allpay, APS, PFS and Sulion all engaged in anti-competitive behaviour by agreeing not to compete or poach each other’s clients.
PFS and
Sulion took part in “anti-competitive” behavior by “agreeing not to compete or poach each other’s clients.”
As mentioned in the announcement, the case deals with pre-paid cards that are regularly used by local authorities to hand out welfare payments to “vulnerable members” of society, including the homeless, victims of domestic violence, and asylum seekers.
In its Statement of Objections, sent to the five different parties on March 31, 2021, the Payment Systems Regulator has alleged that there had been 2 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.”