The UK Payment Systems Regulator (PSR) has announced a review of card-acquirer services following concerns raised by retailers.
The PSR published draft terms of reference for the review on Tuesday, saying it aims “to ensure the supply of card-acquiring services works in the interests of merchants and ultimately consumers”.
The regulator said it would review how merchants buy card-acquiring services, “whether there are credible alternatives” available, and the outcomes “including the fees merchants pay”.
Abta is among the organisations to have lobbied for a review following the abolition of card transaction fees in January under the EU Payment Services Directive (PSD2).
This outlawed transaction charges on consumers’ card payments. However, the interchange fees banks charge retailers on credit card transactions have failed to fall and can be 2% of a transaction.
At the same time, fees for processing debit card transactions have risen.
Abta chief executive Mark Tanzer told Travel Weekly last month: “The promise was that interchange fees would come down to cover the loss [of card transaction fees], but they haven’t.
“That is a real hit to our members, particularly in the agency community – 2% of the cost of a transaction can be 20% of their revenue [on a booking].”
The British Retail Consortium (BRC) welcomed the review, calling it “much-needed”.
BRC policy advisor on payments and consumer credit, Andrew Cregan, described the increase in card fees and charges as “alarming when the retail industry is facing acute cost pressures elsewhere”.
He said: “Retailers spend £1.1 billion on accepting payments of one kind or another every year – the vast majority of which goes to the card payments industry – and our research shows card scheme fees spiralling.”
PSR managing director Hannah Dixon said: “We want to make sure retailers can access card-acquiring services that are competitive, offer value for money and are innovative.
“This is about making sure payment systems work well for everyone.”
More: Special Report: What’s behind the review into merchants’ card costs?