The Payments Systems Regulator (PSR) is looking to carry out a market review into card-acquiring services and has published draft terms of reference for consultation.

Card payment use is growing, with the PSR stating that last year in the UK, 13.2 billion payments were made by debit card and an additional 3.1 billion payments by credit card. Also in 2017, for the first time, debit cards became the most frequently used payment method.

For merchants to accept card payments, they need to buy card-acquiring services. The costs merchants incur for such services may ultimately be reflected in the prices they charge and services they offer to their customers.

The PSR’s review is in response to concerns that have been brought to its attention. It wants to ensure that the supply of card-acquiring services is competitive and works in the interests of merchants – and ultimately consumers.

The draft terms of reference include looking at:

• The nature and characteristics of card-acquiring services.
• Who provides card-acquiring services and how their market shares have developed historically.
• How merchants buy card-acquiring services.
• Whether there are credible alternatives to card-acquiring services for some or all merchants.
• The outcomes of the competitive process including the fees merchants pay and the quality of service they receive.

Hannah Nixon, the PSR’s managing director said she wants to make sure retailers that accept card payments can access card-acquiring services that are competitive, offer value for money and are innovative.

“This is about making sure that payment systems work well for everyone, and we will look to make changes if we think improvements should be made,” she added.

The draft terms of reference are open for consultation until 14 September 2018.

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