The UK’s Financial Conduct Authority (FCA) has launched a competition investigation involving PayPal, Mastercard and Visa.
The regulator is examining suspected anti-competitive conduct linked to the funding and use of PayPal’s digital wallet.
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The probe follows a PayPal filing which said the company received notices in March of investigations and related information requests concerning its contractual arrangements with Mastercard and Visa.
In a statement, the FCA said: “Following the publication of financial reporting by PayPal Holdings, we can confirm we are investigating Mastercard, PayPal and Visa under Chapter I in the Competition Act 1998, and Mastercard and Visa under Chapter II in the Competition Act 1998, for suspected anti-competitive conduct linked to the funding and usage of PayPal’s digital wallet.”
The regulator added that it had not reached any conclusions and had not made findings on whether UK competition rules were breached.
All three companies are cooperating with the FCA, Reuters reported.
Mastercard had received an information notice from the FCA seeking details of its contractual relationship with PayPal.
“Mastercard works to ensure we meet the highest standards of competition law and will be cooperating fully and transparently with the FCA,” a spokesperson told the news agency.
The FCA’s move comes amid rising digital wallet usage in the UK. The FCA and the Payment Systems Regulator (PSR) reported last year that the share of card transactions using a digital wallet rose to 29% from 8% in 2023.
The investigation also follows a report published last year by the FCA and the PSR on digital wallets. The report flagged competition concerns which were shared with the UK Competition and Markets Authority to avoid duplication.
