25 Jan

Urgent review of UK card payments market is needed

This week we have written to the Treasury Minister calling for an urgent review of the UK card payments market.

The letter was co-signed by the Association of Independent Tour Operators (AITO), the Scottish Passenger Agents’ Association (SPAA) and The Advantage Travel Partnership, and included findings from the survey we carried out with Members at the end of last year about card payment charges.

As we highlighted to the Treasury Minister, the research revealed that since the introduction of the European Union’s Interchange Fee Regulation (IFR), more than half of respondents (58%) have experienced increased costs for taking card payments, and very few have made significant savings.

When the European Union introduced the Interchange Fee Regulation, which capped these fees at 0.2% for debit cards and 0.3% for credit cards, the intention was that this would reduce overall card charges and so lower consumer costs. Unfortunately it would appear that card processing companies have simply increased other fees.

The subsequent regulation, the Payment Services Directive 2, which prevent costs being passed on to consumers now mean higher costs or less convenience for all consumers, or higher costs for companies, such as travel agents, who do not have the option of increasing their prices.

This was not what the EU intended when they introduced the regulations and the Government needs to conduct an urgent review so that the whole range of charges made by card companies are proportionate and fair. 

Mark Tanzer, Chief Executive