The Association of Convenience Stores (ACS) has welcomed the Treasury Committee’s announcement that there is no evidence to justify the recent increase in card fees paid by retailers.
The news comes after both MasterCard and Visa – which account for 99% of all card-based transactions – increased cross-border interchange fees for debit and credit card transactions, from 0.2% to 0.3% and 1.15% to 1.5%, respectively.
The Payment Systems Regulator (PSR) said it has “not seen evidence” to suggest operating costs have increased for card issuers, which would in turn justify the recent increases in fees for retailers.
“Given that Visa and Mastercard currently dominate this space, it’s vital to ensure that there is sufficient regulation and competition in the market so that businesses are not subject to ever-increasing servicing costs,” said Chair of the Treasury Committee, Mel Stride MP.
“My committee will be closely following the PSR’s plans to protect consumers and businesses from rising prices, and we look forward to exploring these issues in greater depth when they appear before the Committee in March.”
Findings from ACS’ Voice of Local Shops Survey found that 61% of independent and symbol retailers have not compared or switched acquirers in the past three years. Almost half (48%) of retailers who have compared providers in the past three years did not choose to switch.
ACS’ most recent submission on the review recommends that card companies should provide all pricing information in an easily comparable format. It also asked for contracts to have compulsory end-dates as well as measures to ensure those contracts do not unduly prevent retailers from switching provider.
“Local shops play a key role in providing customers with a variety of payment methods, but the complexity of the card acquirer market and rising costs makes this increasingly expensive for convenience retailers,” commented ACS chief executive James Lowman.
“We are pleased that the Treasury Committee has been examining the cost of card payments for businesses. These costs continue to increase for small businesses and ultimately impact consumer prices.
“The Payment Systems Regulator needs to go one step further and set out a timetable for how it is planning to review scheme fees to provide businesses with clarification.”
A consultation on proposals to improve the card acquirer market for small businesses is due later this month.