UK to investigate costs linked to cards
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Following numerous complaints from retailers, the UK has launched an investigation into the card acquiring market. Indeed, soaring costs have been recorded since the EU imposed a cap on interchange fees. Although coming from a good intention, this cap has only moved the cost elsewhere, encouraging card issuers to increase fees. Consequently, this has an effect on consumer as merchants raise the cost of goods.
According to managing Director of the UK’s Payments System Regulator Hannah Nixon “we want to make sure that retailers that accept card payments can access card-acquiring services that are competitive, offer value for moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More and are innovative” to protect merchants and, consequently, consumers.
13.2 billion payments were made by debit card in 2017 in the UK and with its growing popularity, it is important that the terms of use remain competitive and not a jackpot for card issuers. As Andrew Cregan of the British Retail Consortium states “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” particularly putting pressure on smaller businesses and inevitably forcing them to increase costs, which can be a risky game depending on the size of the business.
The market review is open for consultation until September 14th, 2018.
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