Following the publication of financial reporting by PayPal Holdings Inc, the Financial Conduct Authority (FCA) has today confirmed it is 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.
All three payment companies said they were cooperating with the regulator.
Mastercard confirmed that it had received an information notice from the FCA requesting 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 said.
A Visa representative said it had been informed by the FCA of an inquiry into "contractual provisions regarding the PayPal digital wallet" and it was cooperating with the FCA.
"As this is a pending investigation, we cannot comment further at this time," a PayPal spokesperson said.
Digital wallet usage has surged in Britain. The FCA and Payment Systems Regulator, which is tasked with ensuring an accessible, reliable and fair payment system, said last year that the proportion of card transactions using a digital wallet had jumped to 29 per cent, from eight per cent in 2023.
The watchdogs said in a February joint statement that they had heard calls for better competition among digital wallet providers that would allow new players to enter the market to bolster innovation.
The investigation follows last year's report by the FCA and Payment Systems Regulator on digital wallets, which raised competition concerns that were shared with Britain's antitrust watchdog, the Competition and Markets Authority (CMA), to avoid duplication.
The CMA did not immediately respond to a Reuters request for comment about the FCA investigation.
[Reuters]