UK’s Payment Systems Regulator has imposed a total fine of $45.01m on five payments firms including Mastercard, for their cartel behaviour when providing prepaid cards for local authorities to distribute to vulnerable people.

Mastercard was imposed with the largest fine of $43.04m.

Advanced Payment Solution (APS), allpay, Prepaid Financial Services (PFS) and Sulion were the other firms imposed with a fine.

According to the regulatory agency, the firms breached competition law by agreeing not to compete or wrest each other’s customers on pre-paid cards.

These prepaid cards were issued by local authorities for distribution of welfare payments to vulnerable people such as homeless and victims of domestic violence.

The operation of illegal cartel meant that vulnerable people to whom the cards are being issued could have missed out access to cheaper or quality products.

The PSR found proof of two cartels, with the first operating between 2012 and 2018 and involved all five firms.

Operating between 2014 and 2016, the second cartel saw an arrangement between PFS and APS to avoid competing for each other’s customers when contracts had to be renewed, including via public tender.

In March 2021, the PSR announced that it planned to impose fine on five companies in preliminary findings. On Tuesday, the fine was imposed following conclusion of the probe.

According to the regulatory agency, all the firms admitted to breaching the law.

Payment Systems Regulator managing director Chris Hemsley said: “This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour.”

According to the PSR, at least 150 local authorities worked with the National Prepaid Cards Network, a group bringing together public sector bodies and programme managers from firms such as Mastercard.