No more credit and debit card charges
Cross-border debit and credit card payments made in Europe are costing British retailers millions of pounds, as additional charges are levied from various purchases.
Following a European Court ruling against MasterCard today, the government is being asked to cut all hidden debit and credit card costs that are affecting UK retailers.
The “multilateral interchange fees” system is a charge retailers gain for each card payment transaction they handle.
The decision to cut charges will only apply to cross border debit and credit card payments in Europe.
“I applaud the European Court for holding firm on its decision to end this unjustifiable tax on customers,” said Stephen Robertson, BRC director general.
“This is an historic and highly significant decision on card charges for transactions between European nations but what comes next is crucial - and that should be fairer costs for customers and retailers whenever they pay by card."
CMS Payments Intelligence, a London-based specialist payments consultancy, believes the British government is likely to reduce charges.
Brendan Doyle, CEO of CMS Payments Intelligence, said: "Hidden credit and debit card payments are strangling UK retailers and pushing up prices for customers."
Currently, a retailer would face a charge of up to 40p on a card transaction worth £20, while a customer spending £1,500 on a purchase could lead to the retailer incurring a charge of £30.
Doyle added: "While this ruling only applies to cross-border payments in Europe, for instance when tourists and business people use their cards within Europe, the principles set are much broader and it will open the door to greater regulation of hidden interchange fees domestically in the UK and Europe.”
These fees eventually reach customers as a general cost. Whether you are a retailer or customer, it is important you look in to the different credit cards on the market to see how you can avoid different charges and fees.