London district Fed member Kishore Chandarana, of Tara’s Londis in High Wycombe, urged MPs and regulators to take action to cut card fees at a recent event in Parliament.
The well-known retailer spoke to Conservative MP Shaun Bailey at an ‘Axe the Card Tax’ event in late March. The meeting was aimed at pushing the Payment Systems Regulator to reverse a 600% rise in card payment scheme and processing fees in recent years charged by firms such as Visa and Mastercard.
The shop owner told Better Retailing after the event: “I laid out the impact this is having on shops and customers. For instance, many shops only process utility top-ups via cash because it isn’t feasible to accept card payments due to these costs. The knock-on impact is that many of the most vulnerable people in society, especially in areas without free-to-use cash machines, are struggling to keep the lights on through no fault of their own.”
He continued: “Reducing card fees would help ease the cost-of-living crisis for customers by helping shop owners to keep costs down. It would also give much-needed breathing space to businesses facing a combination of margin pressures. The fact there were so many different sectors at the event, from hospitality and pubs to retail, shows just how far-reaching the impact of these fees are.”
“Twenty-to-30” people were said to have attended the meeting, including a representative from the under-pressure Payment Systems Regulator. The Axe the Card Tax campaign is backed by the Fed and other trade organisations, such as the Federation of Small Businesses, ACS, Charity Retail Association and the Coalition for a Digital Economy.
A letter to the Treasury from Axe the Card Tax last year explained the campaign, stating: “We believe the government and regulators need to take action against monopolistic firms exacerbating the cost-of-doing-business crisis by charging an artificial tax on card payments.
“Over two-thirds of retail payments are now conducted on cards and card payments have become a ubiquitous presence across the economy. But the cost of accepting payment by card is threatening to become ruinously expensive for many businesses.”
The impact of card payment charges is being felt beyond the counter in local shops. Some cash and carries are beginning to ban or penalise payment by card in depots. Elsewhere, NoteMachine said it will introduce cash withdrawal fees on 1,000 previously free-to-use ATMs.
Axe the Card Tax is calling for:
- A ban on further fee rises until an ongoing review by the Payment Services Regulator is completed
- A reversal of cross-border interchange fee hikes
- A separate Treasury review of card payment fees and costs
- New regulations to widen card payment competition and protect cash access
- Enforcement of competition laws where breaches are found
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