EU proposals to cap how much banks can charge card providers such as Visa and Mastercard have been hailed as an “important breakthrough” for retailers.
The proposed regulation includes a cap on ‘interchange fees’ of 0.2% on debit cards and 0.3% on credit cards, which will initially apply to all EU transactions before being rolled out to domestic transactions after a 22-month transitional period.
Other measures include banning rules that prevent retailers from choosing to accept debit cards but not credit cards issued by the same scheme, or from incentivising customers to pay by card types that attract lower merchant fees.
Association of Convenience Stores chief executive James Lowman said: “This is an important breakthrough. Retailers are faced with a card payment market that is complex and lacking in transparency. The cost of card charges significantly reduces retailer profitability and undermines their ability to invest in their business or in lower prices for customers.
“This is already a significant problem for forecourt convenience retailers that are the most reliant on card based transactions.”
He urged the UK government to press ahead quickly with the creation of a dedicated regulator for the for the payments industry to expose and regulate practices that are impacting on retailers and consumers. “There is still a long time to go before these rules will be in force,” he said.