Mastercard and four other companies were fined a total of £33 million ($45.01 million) for their practices involving prepaid cards, with Mastercard being hit with the biggest penalty of £31.56 million ($43.04 million), the Payment Systems Regulator (PSR) said in a statement on Tuesday (Jan. 18).
The other companies fined were allpay, Advanced Payment Solution, Prepaid Financial Services and Sulion. Prepaid Financial Services was fined £916,746; allpay, £28,553; Advanced Payment Solution, £755,419; and Sulion, £572.
“Differences in fines should not be taken to indicate relative culpability,” the PSR said.
The PSR concluded that Mastercard and the other firms were practicing cartel-like behavior involving prepaid cards used by local authorities to distribute payments to vulnerable people — the homeless, victims of domestic violence, and asylum seekers. In February 2018, the PSR searched the premises of some parties, and last March announced its provisional findings.
The five firms violated competition law by making an agreement not to compete with one another or go after each other’s customers, the PSR said. The investigation was launched in 2017 and during the course, all parties involved settled and admitted to violating the law.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behavior. We will intervene and enforce the law strictly to ensure there is effective competition in payments markets,” said Chris Hemsley, PSR Managing Director of the Payment Systems Regulator.
“This case is particularly serious because the illegal cartel behavior meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society,” Hemsley added.
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