The UK's Payment Systems Regulator (PSR) has fined Mastercard and four other companies for "cartel behaviour" in the pre-paid credit card market by agreeing not to poach each others' customers on cards offered by local authorities.
The cards are used to distribute welfare payments are used by people without a home, victims of domestic abuse, asylum seekers, and other vulnerable individuals.
Mastercard, allpay, Advanced Payment Solutions, Prepaid Financial Services, and Sulion were the companies on the receiving end of the fine. Mastercard got the heftiest punishment and will have to pay £31.6 million, out of a £33 million total.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour," said PSR boss Chris Hemsley.
"We will intervene and enforce the law strictly to ensure there is effective competition in payments markets," he continued. "This case is particularly serious because the illegal cartel behaviour 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.”
During the investigation, all five parties admitted to breaking the law and settled with the PSR.
“Mastercard is committed to upholding all regulatory and legal standards and we apologise that the actions of two former employees resulted in the standards expected of us not being met in this instance," the company told TechRadar Pro in a statement.
We have taken this issue very seriously and have put further controls and training in place to ensure it cannot occur again, while working with the PSR to settle this matter at the earliest possible opportunity.”
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