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Card payment fees – The new rules

Card payments account for four out of every five payments made, according to the British Retail Consortium (BRC).

While consumers may prefer to use their card at the checkout, for businesses this switch is landing them with the additional cost of card payments – the fees for which are rising.

According to the Institute of Chartered Accountants in England and Wales (ICAEW), both Visa and Mastercard raised their cross-border interchange fees on purchases made by UK consumers to European businesses in October last year, from 0.2 per cent to 1.15 per cent for debit cards, and 0.3 per cent to 1.5 per cent for credit card transactions.

Meanwhile, transaction fees on digital wallets are also on the up as PayPal increased its fees for payments between businesses in the UK and Europe from 0.5 per cent to 1.29 per cent in November 2021.

Reducing costs to businesses

Following a review by the Payments System Regulator (PSR), the Government watchdog announced new rules in October to improve card services and help businesses shop around and switch to more cost-effective services.

From January next year, 14 of the most significant providers of card-acquiring services will be required to remind businesses at the end of their contract term that they could compare prices to get a better deal.

In addition:

Link: Mitigating card payment costs

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