Payments Giants Probed Over Digital Wallet Conduct

The Financial Conduct Authority (FCA) has launched a rare investigation into PayPal, Mastercard, and Visa concerning alleged anti-competitive conduct linked to the funding and usage of PayPal’s digital wallet. The UK financial regulator announced on Wednesday that it has not yet drawn any conclusions regarding potential breaches of UK competition law. All three payments companies have confirmed their cooperation with the regulator during this inquiry. The announcement followed a filing from PayPal indicating it had received notices in March regarding investigations and information requests from the FCA. These requests specifically concerned contractual agreements between PayPal and the two major card networks. A Mastercard spokesperson affirmed the company’s commitment to meeting competition law standards, while Visa noted its participation in the ongoing inquiry. This regulatory move occurs amidst a notable surge in digital wallet adoption across Britain, with the proportion of card transactions utilizing digital wallets jumping from 8% to 29% in 2023. The investigation follows earlier reports by the FCA and the Payment Systems Regulator (PSR) that highlighted competition concerns within the sector. These concerns were subsequently shared with Britain’s antitrust watchdog, the Competition and Markets Authority (CMA), which launched a separate inquiry into Apple and Google’s mobile ecosystems in January 2025.