Call to remove card interchange fees

The interchange fees retailers pay on transactions to card companies should be abolished to protect stores, according to the British Retail Consortium.

The trade group’s latest report on card payments found retailers including convenience stores and newsagents had paid out more than £1billion in transaction fees in 2020, and accused card firms such as Visa and Mastercard of “anti-competitive behaviour” that harms both retailers and shoppers.

BRC has joined British Independent Retailers Association (Bira), Association of Convenience Stores (ACS), Federation of Small Businesses (FSB), and UKHospitality to say that immediate action must be taken to tackle soaring card fees which add to the price of goods and services.

Retailers urged to check card payment terms

The group says that the national regulator is failing to meet its statutory objectives and that its new Strategy is a five-year license to deliver very little.

According to the BRC’s Payments Survey published on 21 September, debit cards have also seen a transaction fee rise by 22% or 7.2 pence per transaction in the last year alone.

Andrew Cregan, payments policy advisor at the British Retail Consortium said: “Retailers are being punished through the soaring cost of accepting such payments. Parliament needs to urgently intervene in this anti-competitive behaviour by regulating card scheme fees and abolishing interchange fees, both of which ultimately hurt consumers. Card firms are abusing their dominant market position, and this must come to an end.”

Convenience sector to take on banks over card charges?

Convenience trade groups such as the ACS have also regularly called for more transparency in card payments, and an end to ‘opaque card scheme fees’. Responding to the new Payment systems Regulator’s five year strategy earlier this month, ACS chief executive James Lowman said the regulator “must act to prevent excessive increases in card scheme fees for debit and credit cards. The card acquirer review is a positive step but needs implementing so that retailers can shop around and switch card payments providers, securing the best deals for them and their customers.”