The City watchdog has confirmed it is investigating a trio of payments giants over alleged anti-competitive conduct. The Financial Conduct Authority (FCA) will probe Mastercard, Paypal and Visa under the Competition Act 1998 regarding its suspected conduct related to the “funding and usage” of Paypal’s digital wallet.
Details of the Investigation
Paypal’s digital wallet is an app-based system that stores payment methods – such as specific branded cards like Mastercard and Visa – to enable online, in-store contactless, and app-based payments. The legislation prohibits agreements, practices and conduct that may damage competition in the UK.
All three companies are facing a probe under Chapter I of the act, which prohibits agreements that could prevent, restrict or distort competition within the UK. Mastercard and Visa are also being investigated under Chapter II, which concerns the abuse of a dominant position in a market that may affect trade within the UK.
Background of Regulatory Scrutiny
This marks another round of regulatory scrutiny for the two payment giants in the UK. In December, the pair – along with Revolut – lost a legal battle against the UK’s payments watchdog amid plans to introduce a cap on card fees for overseas transactions.
All three companies were contacted for comment. This is a breaking news story – more to follow.
