Mastercard fined £31.5m over illegal UK prepaid cards cartel
Five payment companies including Mastercard have been fined a total of more than £33m for operating illegal cartels when providing prepaid cards for local authorities to distribute to vulnerable people.
The companies were found by the Payment Systems Regulator to have broken competition law by agreeing not to compete with each other for the authorities’ custom.
The regulator said that by acting in this way, the providers may have denied the councils access to cheaper products, and vulnerable people may have missed out on better quality services.
The cards in question were used to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.
Benefits payments or emergency funds could be uploaded to the cards and used to pay for goods and services without the holder needing access to a bank account.
The PSR launched an investigation in October 2017 and carried out dawn raids on premises in February 2018.
It found evidence that between 2012 and 2018 five companies – Mastercard, allpay, Advanced Payment Solutions (APS), Prepaid Financial Services (PFS) and Sulion – were involved in a cartel, although some did not participate for all of that time.
The cartel was organised against the backdrop of the National Prepaid Cards Network, which was sponsored by Mastercard and brought together public sector bodies that were potentially interested in prepaid cards and programme managers.
The five parties arranged for the programme managers not to target or poach each other’s customers, and colluded on the allocation of potential business contacts that came in via network events.
Between 2014 and 2016 there was a second cartel involving APS and PFS, with the companies
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