PSR moves to strengthen transparency and governance in UK card scheme fees
The Payment Systems Regulator (PSR) has published draft directions that could meaningfully change how UK card scheme fees and card processing fees are regulated across the payments ecosystem.
Following its market review into card payments regulation in the UK, the PSR concluded that Mastercard and Visa face limited competitive pressure, with card scheme pricing continuing to rise and insufficient transparency for businesses accepting card payments. In response, the regulator is consulting on two targeted remedies aimed at improving outcomes for acquirers and merchants operating within the UK payments market.
Here’s what’s being proposed.
Information transparency & complexity (ITC)
At a high level, the PSR wants greater transparency in card scheme pricing, making it easier for acquirers and merchants to understand, reconcile and assess card payment fees. The aim is to support better commercial decision-making and improve outcomes across the payments value chain.
If implemented, Mastercard and Visa would be required to:
- Provide clear baseline information on all existing card scheme and processing fees (ITC1)
This would include what triggers a fee, how it is calculated, its expected impact, and how fees can be reconciled, including unique billing identifiers and transaction-level reconciliation data where relevant. This is designed to address ongoing complexity in UK card processing fees. - Give advance notice of new or changed card scheme fees (ITC2)
Key details would need to be shared at least six months before implementation, with a narrower exception for new, optional opt-in services. This change is intended to improve pricing transparency for acquirers and merchants. - Engage directly with acquirers on compliance and delivery
This would involve:- writing to acquirers within three months setting out how the scheme plans to comply with the PSR’s card payments regulation, and seeking views; and
- responding within six months with a summary of feedback and a confirmed implementation timetable.
- Implement changes within a defined timeframe
All measures would need to be implemented within 12 months of the PSR’s final decision or commencement date. - Apply a low-revenue carve-out
Certain advance notice requirements would not apply where a fee is forecast to generate under £100,000 in the following financial year, although reporting obligations to the PSR would still apply.
Pricing governance for card scheme fees
Alongside transparency, the PSR is also proposing enhanced pricing governance standards for card schemes, focused on how card scheme pricing decisions are made and documented.
In practice, this would require Mastercard and Visa to evidence how pricing decisions are reached and to demonstrate that appropriate consideration has been given to the impact on acquirers, competition and innovation, not just commercial objectives.
If implemented, the proposals would require card schemes to:
- Create a written “Acquirer Fee Decision Record”
This would apply to decisions to introduce or change UK acquirer fees, capturing the rationale, supporting documents and internal approvals.
- Apply a formal pricing decision principle
Schemes would need to show they have paid due regard to service users’ interests by assessing, where reasonably practicable, the impact on acquirers, competition, innovation and resilience alongside their own commercial considerations.
- Introduce compliance processes and training
These would need to be in place within four months, with the approach, including templates for decision records, shared with the PSR as part of ongoing payments regulatory compliance.
- Assign senior accountability
An Executive Manager would be appointed to oversee and sign off on reporting related to card scheme governance.
- Submit annual regulatory reporting
Mastercard and Visa would be required to submit annual reports to the PSR, including an overview of fee decisions and a compliance report, within one month of the end of each financial year.
- Apply a financial threshold
Record-keeping requirements would generally apply to fee decisions forecast to generate more than £100,000 in the following financial year, with anti-avoidance rules where multiple related changes are made.
What’s happening alongside this?
In parallel, the PSR is progressing work on regulatory financial reporting for card schemes, with a further consultation expected in spring 2026. This will give the regulator deeper insight into the financial performance and profitability of UK card payment schemes, including Visa and Mastercard.
What happens next?
The PSR is consulting on the draft directions before finalising and implementing the remedies. Once in force, these changes are expected to have important implications for card schemes, acquirers and merchants, both from a payments regulatory compliance and commercial strategy perspective.
Our view
These proposals signal a clear shift towards closer regulatory scrutiny of card scheme pricing in the UK. Businesses operating across the payments value chain including fintechs, acquirers and merchants should begin assessing how enhanced pricing transparency and governance requirements may affect contracts, pricing models and internal processes.
At Founders Law, we regularly advise on payments regulation, fintech compliance, and card payments legal advice for high-growth businesses navigating UK financial regulation.
We’ll keep you up to date as the consultation progresses and when the PSR publishes further detail, including on regulatory financial reporting, in 2026.
