Bank Cards: Fees and Charges

Treasury written question – answered on 20th October 2021.

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Photo of Nick Brown Nick Brown Chair, Finance Committee (Commons), Chair, Finance Committee (Commons)

To ask the Chancellor of the Exchequer, what support he is making available for small businesses paying high bank card processing fees to prevent them reverting to cash-only transactions.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Payment Systems Regulator (PSR) was established in 2015, with statutory objectives to promote competition, innovation, and to ensure that payment systems are operated in a way that considers the interests of all the businesses and consumers that use them.

The PSR is currently carrying out a market review into card acquiring services to examine how effectively competition is working in the provision of these services. This includes an assessment of the fees that small and medium-sized businesses pay, including card scheme and interchange fees, and the quality of service they receive. The Government looks forward to the final PSR report and recommendations later this year.

Furthermore, the Government has legislated to ensure the interchange fees businesses pay remain capped for all UK domestic card transactions where both the card issuer and acquirer are located in the UK. This was facilitated through the Interchange Fee (Amendment) (EU Exit) Regulations 2019 made under the European Union (Withdrawal) Act 2018. UK interchange fee caps are therefore at the same levels as before the end of the Transition Period.

It remains the individual retailer’s choice as to whether to accept or decline any form of payment, including cash or card.

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