Prepaid financial services among five firms fined by UK regulator for card cartel


Prepaid Financial Services (PFS) has been fined £916,746 (€1.1 million) by the UK payment systems regulator following an investigation into cartel behavior in prepaid cards issued to vulnerable people receiving social benefits.

The regulator found five parties breached competition law and fined them. Mastercard received the largest fine of £31.5 million (€37.7 million). The other four companies involved – PFS, Advanced Payment Solutions, Sulion and Allpay – received varying fines less than £1 million.

the cards have been used by local authorities to distribute social benefits to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.

The Payments Systems Regulator (PSR) said the firms breached competition law by agreeing not to compete or poach each other’s customers on prepaid cards offered by local authorities to distribute social benefits for vulnerable people.

During the investigation, all parties colluded and admitted to breaking the law, the regulator said in a statement..

PSR chief executive Chris Hemsley said the case was “particularly serious because the cartel’s illegal behavior meant there was less competition and less choice for local authorities”.

“That means they may have missed out on cheaper or better products that were used by some of society’s most vulnerable.”

The investigation and the “significant fines” imposed “send a clear message that the PSR has zero tolerance for cartel behavior,” Mr Hemsley said.

This decision closes the regulator’s investigation opened in 2017 following a complaint filed by Allpay regarding one of the breaches. The payment systems regulator announced its tentative findings in March last year.

The acquisition of Noel and Valerie Moran’s PFS by Australian payments company EML was first announced in November 2019 in a high-profile deal. In a statement last March, EML said it had received guarantees from the owners prior to the sale of the business to cover any fines that may be imposed as a result of the investigation by the UK payment systems regulator.

In Ireland, Prepaid Card Services, part of the former PFS, remains under investigation by the Central Bank. EML has previously said the Central Bank’s concerns initially flagged last May related to anti-money laundering and anti-terrorism funding, risk and control frameworks and the governance of Irish subsidiary Prepaid Financial Services.


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