Mastercard and four other companies broke UK law by engaging in cartel behaviour in the pre-paid card market, according to the country's Payment Systems Regulator (PSR).
Mastercard, allpay, APS, PFS and Sulion engaged in anti-competitive behaviour by agreeing not to compete or poach each other’s clients when it came to pre-paid cards that are used by local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers, says the PSR in its provisional findings.
Mastercard, allpay and PFS have already agreed to settle and admitted that they took part in the alleged anticompetitive arrangement. Should the PSR ultimately conclude that there have been infringements, the three have agreed to pay maximum fines totalling over £32 million.
According to the PSR there were two infringements of competition law. The first, involving all five firms took place between 2012 and 2018. The second, involving APS and FPS lasted between 2014 and 2016.
Chris Hemsley, MD, PSR, says: "Pre-paid card services, like these, can provide significant benefits to local authorities as one way to make welfare payments to some of the most vulnerable people in society.
"By colluding in this way, we consider the parties were acting as a cartel. Because of the reduced competition local authorities may have been missing out on an alternative supplier or products that were either cheaper or better suited to both their needs and the needs of those using the pre-paid cards."