Regulator opens card industry review as fees spiral

A review has been opened after concerns were raised the market is not working for retailers and consumers.

Concerns raised have largely focused on card-acquiring services for Mastercard and Visa, which will form the focus of the review.

The British Retail Consortium (BRC) has welcomed the review and will take part in the consultation process.

BRC policy adviser for payments and consumer credit Andrew Cregan said: “We’re continuing to make the case for measures to tackle the alarming increase in card fees and charges at a time when the retail industry is facing acute cost pressures elsewhere.

“Retailers spend £1.1bn on accepting payments of one kind or another every year – the vast majority of which goes to the card payments industry – and our research shows card scheme fees are spiralling, which inevitably pushes up costs for ordinary shoppers.”

Providers of card-acquiring services accept and process card payments on behalf of a merchant, but there can be a lack of transparency around the amount the merchant pay for the service.

The PSR has also had concerns raised with it about fees merchants are forced to pay “increasing significantly”. Acquirers have also been accused of not passing on to smaller retailers the saving made from the interchange fee caps introduced by the Interchange Fee Regulation.

The review will also explore barriers making it hard for merchants to compare and switch acquirers.