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Retailers welcome ruling on card fees

Retailers welcome ruling on card fees

UK retailers have today welcomed an historic court ruling to end card fees retailers pay banks to process card payments (known as interchange fees).

Today’s judgement by the European Court of Justice comprehensively and decisively

Visa and MasterCard logo icons

Retailers welcome ruling on card fees

supports retailers’ decade-long campaign for a reduction in card fees, which cost, the retailers argue, “UK businesses £1 billion a year, which would otherwise be invested in further improving value for the customer”.

This ruling provides further support for on-going European regulatory developments to set a cap for interchange fees, for the benefit of businesses of all sizes and their customers.

Helen Dickinson, Director General of the British Retail Consortium, said: “We are delighted with this historic ruling. Capping these excessive and anti-competitive fees will support the UK retail industry and others, boosting our ability to invest and innovate while continuing to deliver lower prices and value for customers.”

While retailers welcome the ruling, the UK is already falling behind other European countries that have introduced more immediate domestic caps and provided much needed redress for their retail businesses. France, Spain, the Netherlands, Poland, Romania and Hungary have started or already taken action – as have the USA, Australia and Canada outside of Europe.

It should be noted, as PCM has reported before, that in no instances where lower fees have been mandated have these savings been passed onto the customer.

“While this is great news, the UK risks falling behind other countries who have already chosen to act to reduce the anti-competitive costs of interchange fees at a domestic level. There is a real opportunity for the Government and Payment Systems Regulator to go further and faster by taking more immediate action in the UK so that British consumers benefit as quickly as possible,” Dickinson rants.

Fifteen retail chief executives, representing a third of UK retail sales, recently wrote to the newly created Payment Systems Regulator, requesting it to act without further delay. “These excessive costs cannot be allowed to continue to delay the introduction of effective competition in the banking sector, to the detriment of businesses both large and small,” they argue.

Historic notes:

  • 2000 – BRC filed original complaint against MasterCard.
  • 2007 – European Court ruled against MasterCard. MasterCard launched their Appeal.
  • 2012 – European Court dismissed the MasterCard Appeal. MasterCard filed the second and final appeal.
  • 2014 – In January the Advocate General (adviser to appeal judges) recommended that MasterCard’s second appeal be dismissed on all counts.

The post Retailers welcome ruling on card fees appeared first on Payments Cards & Mobile.

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