Mastercard and four other companies have been fined more than £33m for operating a cartel in the market for prepaid cards for vulnerable people.
The Payment Systems Regulator (PSR) said on Tuesday the companies had broken competition law by agreeing not to poach customers for the cards, which are used to distribute welfare payments to vulnerable people such as the homeless and victims of domestic violence.
Mastercard has been fined £31.5m with the rest split between Prepaid Financial Services, allpay, APS and Sulion following the investigation, which related to cartels operating between 2012 and 2018.
It is the first time the PSR has imposed a financial penalty.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour,” said Chris Hemsley, PSR managing director.
He added: “This case is particularly serious because the illegal cartel behaviour meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better quality products which were used by some of the most vulnerable in society.”
Mastercard said: “We apologise that the actions of two former employees resulted in the standards expected of us not being met in this instance.”
It added: “We have taken this issue very seriously and have 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.”