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Parliament's Treasury Select Committee said the companies, whose
networks account for 99% of card transactions in Britain, had
increased the scheme and interchange fees paid by businesses to
card issuers when a card is used.
"Given that Visa and Mastercard currently dominate this space,
it's vital to ensure that there is sufficient regulation and
competition in the market so that businesses are not subject to
ever-increasing servicing costs," the chair of the committee,
Mel Stride, said in a statement.
Mastercard and Visa had no immediate comment.
Businesses pay scheme fees to be part of a payments network and
interchange fees that are based on individual transactions.
Increases in fees merchants pay to card issuers are typically
passed on to consumers, regulators have said.
Britain's Payment Systems Regulator (PSR) said in November that
card services did not work well for smaller businesses.
It told Stride in a letter on Thursday that it will propose
"remedies" this month to tackle rising scheme fees, which have
doubled between 2014 and 2018.
"Our analysis indicates a substantial proportion of these
increases were not explained by changes in the volume, value or
mix of transactions," the PSR said. "Our ongoing engagement with
merchants suggests that they have continued to significantly
increase since then."
Amazon.com said in November it would stop taking payments from
Visa credit cards in Britain from mid-January due to rising
fees.
Graphic: PSR Interchange Fees Graphic-
https://fingfx.thomsonreuters.com/
gfx/mkt/klvykqbywvg/PSR%20Graphic%20on%20Interchange%20Fees.PNG
Interchange fees for purchases by British consumers from the
European Union rose last year after an EU cap ended due to
Britain's full departure from the bloc at the end of 2020. Fees
for purchases in Britain, however, remain capped under UK rules.
The PSR said it was closely monitoring the increases in
cross-border interchange fees in October by Visa and Mastercard,
saying it had seen no significant changes in costs for issuers.
"Our proposed work will be looking more closely at the reasoning
behind the recent increases and whether this indicates any
themes or concerns that warrant action from us," it said.
Stride said the Treasury committee would discuss the regulator's
plans at a hearing in March.
Efforts in the EU to end the dominance and Mastercard have had
mixed results.
(Reporting by Huw Jones; Editing by David Clarke)
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