Convenience store owners and independent retailers are calling for more transparency in the way that card fees are set and changed, and a price cap to protect retailers and other businesses from unnecessary price hikes.
Responding to a consultation from the Payment Systems Regulator on improving the card fees market, Association of Convenience Stores (ACS) has raised the demand along with several other recommendations aimed at ensuring that excessive fees are not charged.
In the consultation, the PSR (Payment Systems Regulator) is considering how to make the card scheme and processing fees market more transparent and fairer for merchants (businesses that take card payments).
This includes better information, accountability and reporting to allow the PSR to effectively monitor the way that fees are set and administered.
The consultation comes after a report by the PSR earlier this year which stated that there was "little evidence that fee increases are linked directly to any changes in relevant costs or that new fees are set on the basis of detailed cost analysis" and that "Mastercard and Visa do not provide sufficiently clear and detailed information to acquirers".
ACS’ submission sets out several recommendations on behalf of the convenience sector aimed at ensuring that excessive fees are not charged and that the market remains competitive – these include:
- Requiring Visa and Mastercard to provide at least three months notice before the introduction of new fees
- Requiring card scheme acquirers (for example banks) to provide merchants clear advance notice and itemisation of any fees being passed on by Visa and Mastercard
- Introducing a longer term price cap on scheme and processing fees to protect merchants from unjustified cost increases
ACS chief executive James Lowman said, “Convenience retailers are committed to providing a wide range of payment methods to enable customers to pay in the way that they want to, but the cost of doing so is increasing at an unjustifiable rate.
"Businesses feel as though they are being taken advantage of, and need intervention from the Payment Systems Regulator to make the card scheme fees market transparent and accountable.”
Figures from the 2024 Local Shop Report show that the vast majority of convenience retailers accept multiple forms of payment- 99 per cent accept cash, 98 per cent accept debit cards, 97 per cent accept credit cards, and 90 per cent accept contactless and mobile payments.
In April of this year, the House of Commons Treasury Committee published a report on the acceptance of cash and other payment methods which stated, "We are disappointed that there is not more clarity on the costs of different payment types, and that businesses are continuing to bear the costs of a lack of competition in the payments processing market."
The full submission is available here: https://cdn.acs.org.uk/public/lobbying/ACS%20Submission%20-PSR%20scheme%20and%20processing%20fees%20remedies%20consultation.pdf
