PayPal, Mastercard, Visa face UK competition probe over digital wallet deals

The UK Financial Conduct Authority (FCA) has launched an investigation into PayPal, Mastercard, and Visa regarding allegations of anti-competitive conduct linked to the funding and usage of PayPal’s digital wallet. This marks a rare instance where the regulator has utilized its powers to enforce competition law among financial services firms. The FCA stated on Wednesday that it had reached no conclusions about whether UK competition law had been broken at this stage. All three payment companies confirmed they were cooperating with the regulator. Mastercard noted it had received an information notice requesting details of its contractual relationship with PayPal, while a Visa representative acknowledged an inquiry into contractual provisions regarding the PayPal digital wallet. A PayPal spokesperson added that as this is a pending investigation, they could not comment further. Digital wallet usage has surged significantly in Britain, with the proportion of card transactions using a digital wallet jumping to 29% from 8% in 2023. The FCA and Payment Systems Regulator highlighted calls for better competition to allow new players to enter the market and bolster innovation. This investigation follows a report last year that raised competition concerns shared with the Competition and Markets Authority (CMA) to avoid duplication. Separately, the CMA launched an inquiry into Apple and Google’s mobile ecosystems in January 2025. By February, the CMA secured commitments from the tech giants to improve fairness in app store processes and enhance interoperability. The CMA did not immediately respond to a request for comment regarding the FCA investigation.