ACS (the Association of Convenience Stores) has welcomed the publication of terms of reference for a market review into the supply of card payment services from the Payment Systems Regulator.
The review will look at the fees that are charged to merchants (retailers) by acquirers such as WorldPay, Barclaycard and others. This fee, known as the merchant service charge rate, includes the interchange fee (capped by EU regulations), profit for the acquirer, and card scheme fees which are currently unregulated.
Under EU Interchange Fee Regulations, the interchange fees for card payments have been capped at 0.2% for debit cards and 0.3% for credit cards. However, the Payment Systems Regulator notes that there are concerns that ‘acquirers are holding on to the savings they made from the IFR interchange fee caps, which could indicate that some merchants – especially smaller merchants – are suffering significant harm because competition in the supply of card-acquiring services is not working well.’
The PSR also highlight concerns over a lack of transparency around the fees that merchants pay to accept card payments, and rules around card scheme fees which according to the PSR the cost of which are ‘increasing significantly’.
ACS chief executive James Lowman said: “The cap on interchange fees for card transactions was a welcome step forward, but we remain concerned about whether this cap is being passed on to retailers who also have to deal with the increasing cost of card scheme fees which are unregulated. We welcome this review, and encourage the Payment Systems Regulator to look closely at all the fees paid by retailers to allow them to offer card payment facilities to their customers.”
ACS has previously called on the Payment Systems Regulator to look closely at the card payments market to ensure that it is operating fairly and does not unfairly target smaller businesses.
The vast majority of convenience stores accept card payments, with 71% of stores offering additional payment technology such as contactless payment (Local Shop Report 2017).
The consultation on the draft terms of reference will run until 14th September. ACS will be making a submission in due course. The full terms of reference document is available here: https://www.psr.org.ukhttps://cdn.acs.org.uk/public/media/PDF/Cards_terms_of_reference_July_2018_MR18_1.1.pdf
