Mastercard and Visa do not face enough competition in the payments market, meaning UK businesses are forced to pay higher fees to process transactions, according to a new report by the UK payments watchdog. The Payment Systems Regulator (PSR) said it has provisionally concluded the cards market is not working well and it is considering placing new rules on the two major players. But it rowed back on previous suggestions that it could introduce a price cap to protect UK businesses from certain fees. Mastercard and Visa account for 95% of transactions using UK-issued cards, the PSR revealed in its report. But this means they do not face effective competition when dealing with merchants and acquirers, according to the regulator. Acquirers are banks or financial institutions which act as an intermediary between retailers and payments firms so they can process card payments. “Every time someone uses a Mastercard or Visa card, UK businesses have to pay fees,” said PSR managing director Chris Hemsley. “These fees have significantly increased over recent years, and those increases cannot be explained by improvement in service quality.” The watchdog said it found evidence that the two dominant payments firms provide complicated and unclear pricing information...