A group of trade bodies representing tens of thousands of businesses across the retail and hospitality sectors are appealing for Parliament to intervene to protect British businesses and consumers from the mounting cost of anti-competitive practices in card payments.
The British Retail Consortium (BRC), British Independent Retailers Association (BIRA), Association of Convenience Stores (ACS), Federation of Small Businesses (FSB), and UKHospitality say immediate action must be taken to tackle soaring card fees which add to the price of goods and services.
The call comes as the UK’s Payment Systems Regulator consultation on its five-year Strategy closes today. The group says that the national regulator – an independent arm of the Government, accountable to MPs – is failing to meet its statutory objectives and that its new Strategy is a five-year license to deliver very little at the taxpayers’ expense.
Since the pandemic, British businesses and their customers have become more dependent on card payments than ever before, with more customers shopping online or paying by card in store. Cards now constitute more than 80% of UK retail sales, with Visa and Mastercard accounting for 99% of card transactions. Retailers spent £1.3bn in 2020 to accept payments from their customers and ultimately these costs, equivalent to more than £46 per household, will be passed onto the consumer.
BRC, BIRA, ACS, FSB and UKHospitality came together in a similar joint call last year but no action has so far been taken by the Regulator. This time the trade associations are calling on Parliament and its Treasury Committee to urgently intervene. Nearly 40 cross-party MPs have already written to the Regulator this year calling for robust regulatory measures on card fees.
Last year, the UK Supreme Court ruled that Visa and Mastercard interchange fees are unlawful. The UK should not continue to allow such fees and the Regulator must directly address anti-competitive card fees in its future Strategy.
Andrew Cregan, head of finance policy, British Retail Consortium said: “Our national regulator is proposing vague and distant goals for tackling today’s payment problems and it’s far too little, too late. The Treasury Select Committee should conduct an appraisal of the PSR’s effectiveness and the value of this Strategy.”