Retailers welcome landmark proposal to cap card processing fees
UK retailers have welcomed a landmark proposal by the European Commission to cap fees charged by banks for the use of credit and debit cards.
The commission has proposed new regulations to cap interchange fees, which retailers pay to card schemes and banks to process payments customers make using credit and debit cards. These currently vary from 0.1% to 2.5% and cost UK retailers £850 million a year.
The British Retail Consortium has been campaigning for a decade for a cap in the fees, which are absorbed into retailers’ costs. The average charge for credit cards is 0.9% of the transaction, but the legislation would cap these fees at 0.3% and debit card fees at 0.2%.
The cap will apply initially to cross-border payments, rolling out to UK rates within two years.
Never Miss a Retail Update!Helen Dickinson, BRC director general, said: “We’re delighted with this landmark proposal. Capping these excessive and anti-competitive fees will support the UK retail industry by £362 million a year, boosting the industry’s ability to invest and innovate while continuing to deliver lower prices and value for customers.
“While this is great news, there is a real opportunity for the Government to go further and faster by making more substantial and immediate cuts through the proposed economic regulator for payments – this means that UK consumers could benefit much more quickly.”
