Mastercard has apologised for the actions of two former employees after the Payment Systems Regulator (PSR) accused the firm, along with others, of acting like a cartel.
The payment technology provider issued the statement in response to a statement of objections issued by the PSR, alleging that Mastercard, allpay, APS, PFS and Sulion engaged in anti-competitive behaviour by agreeing not to compete or poach each other’s clients.
The case relates to pre-paid cards that are used by local authorities to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.
The statement from Mastercard said: “Mastercard is committed to upholding all regulatory and legal standards and we apologise that the actions of two former employees resulted in the standards expected of us not being met in this instance.
“We have taken this issue very seriously and have worked to put further controls and training in place to ensure it cannot occur again, while working with the PSR to settle this matter at the earliest possible opportunity.”
Mastercard, allpay and PFS admitted liabilities for breaching competition rules and agreed to settle. If the PSR concludes there were infringements, the three firms will pay maximum penalties totalling over £32m.
Chris Hemsley, managing director of the PSR, said: “Pre-paid card services, like these, can provide significant benefits to local authorities as one way to make welfare payments to some of the most vulnerable people in society.
“By colluding in this way, we consider the parties were acting as a cartel. 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 pre-paid cards.
“Collusion in payments is absolutely unacceptable. Where we see it happening, we will take action, stop it, and seek to impose significant penalties.”