Stores welcome regulator review into card payments market

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C-store retailers have welcomed the Payment Systems Regulator’s (PSR) review into card payments, which will see it determine whether retailers are being unfairly treated by card-acquiring services and payment facilitators.

The PSR has confirmed its terms of reference for the review, which comes amid concerns that the market “may not be working well” for retailers.

PSR head of policy Chris Hemsley said: “We want to make sure the card-acquiring market is working for businesses and ultimately consumers. If we find that the market is not working well, we will look to make changes.”

Hampshire Welcome Co-op franchisee Richard Dance said costs across his seven stores “rack-up to be a sizeable chunk of money each month”.

He added: “For what is essentially a paperless transaction, it does cost a lot of money across my seven stores. It is far too high a price for something that is automated,” he said.

“The costs vary area to area on how frequent card payments are used, but across all my stores 60% of sales are through cards.”

Card payments are an increasingly important payment method, with debit cards becoming the most frequently used payment method in 2017, according to the PSR. However, in January 2018 a ban on retailers charging consumers for card use was introduced.

In Norfolk, Mike Humphries, owner of Kenninghal Stores (Premier), has seen a huge increase in card payment transactions. “More than 50% of our transactions are card payments, which has gone up 100% over the past year, even though I stipulate a minimum £5 spend to use a card.

“It’s all because of contactless,” he said.

“Card companies have a monopoly - I’ve got a good rate because I negotiated, but I still pay about £500 in fees a month between both of my shops. Before, I paid about 12p per transaction. You need to know how to negotiate with them.”

Scott Graham, owner of McLeish Inverurie in Scotland, added: “It’s frustrating that we used to be able to charge under a certain amount, but can’t do that now. I would welcome any help we can get. We’ve just last week been informed of another increase.”

Alex Kapadia, Bargain Booze franchisee, Dunstable, Bedfordshire he had “really good rates” due to an agreement between Bestway and is provider. “But I hear stories of other people’s struggles,” he added.

In its review, the PSR will examine:

The nature of card-acquiring services

How merchants buy card-acquiring services

Who provides card-acquiring services and how their market shares have developed

Whether there are credible alternatives to card-acquiring services for some or all merchants

What the market is delivering for merchants and consumers, including the fees merchants pay and the service they receive.

The PSR will be gathering evidence throughout 2019, with a view to publishing an interim report before the end of the year.

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