Chris Hemsley, chief executive of the payment systems regulator, has come under heavy pressure from Parliament’s Treasury Select Committee to tackle card charges more quickly.
Interchange fees levied by Mastercard and Visa on retailers for purchases made by consumers in the European Union have increased in 2021 after an EU cap ceased to apply in Britain following its departure from the bloc .
Five months ago, the regulator told the commission that, despite requests for information, the rise could not be explained by changes in volume, value or the trading landscape.
“At this time, we don’t have a good explanation as to why the costs have changed,” Hemsley told lawmakers on Wednesday.
Committee Chairman Mel Stride and other lawmakers have urged Hemsley to move faster and “restore the cap”.
“I’m frustrated with this too. There’s no very quick fix to this problem,” Ms Hemsley said, adding that such inquiries can take up to four years to fully conclude.
“It will take time,” he added.
Visa and Mastercard account for about 90% of retail card payments, a sign that the market is not functioning properly, Mr. Hemsley said.
But the payments regulator must conduct its investigation carefully to ensure “solid” conclusions against “huge multinational organizations with significant resources” such as Visa and Mastercard, said Charles Randell, outgoing president of the PSR.
No other regulator globally has confronted the two card companies in the same way, he added.
Mastercard and Visa had no immediate comment.
Mr Hemsley, who rejected retailers’ accusations of being ‘scammed’ by Visa and Mastercard, said the regulator would publish more details of its investigation next month.
The EU has also long sought to inject more competition into a market dominated by the American duo, but so far without much success.