Mastercard and Competitors to Pay $44 Million for Preying on the Weak

Britain’s Payment Systems Regulator (PSR) is accusing Mastercard, allpay, APS, PFS, and Sulion of engaging in cartel behavior by agreeing not to poach each other’s customers. This behavior is illegal in the UK.

It may seem kind of wholesome on the surface, but this practice can prove damaging for the vulnerable population (the homeless, welfare recipients, asylum seekers, etc.) because it limits the options for prepaid cards used by the local authorities to distribute their welfare payments. As Chris Hemsley, the managing director of the PSR, put it:

“Because of the reduced competition, local authorities may have been missing out on an alternative supplier or products that were either cheaper or better suited to both their needs and the needs of those using the prepaid cards.”

We’ve mostly covered credit cards before, especially ones from Mastercard, but prepaid cards are different. They work similarly to gift cards—each user has a certain amount of money to spend on their card, making them a convenient means of distributing welfare.

Cartel Behavior to Be Severely Punished

Although, in this case, “cartels” have no connection to drug wars, the negative connotation still stands. Basically, a cartel is a behind-the-scenes arrangement between companies not to compete with each other.

Cartel behavior can present itself in several forms:

  • Price fixing—agreeing on prices to avoid competition
  • Bid rigging—bidders determine the winner of the bid beforehand
  • Restricting output—competitors conspire to limit the availability of their goods
  • Market sharing—agreeing not to compete for the same customers

Did the last one sound familiar? Because that’s exactly what these five companies did.

With a short pause during 2016, Mastercard sponsored the National Prepaid Cards Network—a network promoting the use of prepaid services in public sector payments. The network members are public sector bodies (e.g., local authorities) interested in prepaid cards and Mastercard program managers.

An agreement was made that no non-member project managers would target each other’s customers using the network’s services in England, Scotland, and Wales. Their deal lasted from 2012 to 2018. APS and PFS had an additional separate deal between 2014 and 2016.

Cartel behavior is prohibited by the UK’s 1988 Competition Act as well as Article 81 of the European Community Treaty due to its colluding and dishonest nature. This is why it comes as no surprise that the incriminated companies will have to pay a hefty fine.

Mastercard, allpay, and PFS have admitted their involvement in these anti-competitive practices and agreed to settle with the PSR. If the PSR confirms their alleged infringement, the combination of their fines will amount to $44 million.

The investigation is ongoing, and all parties will have the opportunity to present their response before the Payment Systems Regulator reaches a conclusion.


My eyes rarely take a break from staring at my laptop's screen—I am Big Brother, scanning the web for news and information worth sharing. Full transparency—a substantial chunk of my screentime is also dedicated to watching TV shows, but balance is key, right? Writing is how I choose to share my findings with the world while keeping my love of language and creativity alive.

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