The Payment Systems Regulator (PSR) have published their interim report on the supply of card acquiring services. It identifies three areas of concern: on merchant contracts for card acquiring services, on point-of-sale (POS) terminal contracts, and on the difficulty for merchants to compare prices.

The interim report includes several potential remedies to make it easier to search and switch for a new provider or better deal, including:

  • Requiring all contracts for card-acquiring services to have an end date, providing a prompt for merchants to shop around.
  • Requiring changes to POS terminal contracts to limit their length, ending contracts that auto-renew for successive fixed terms and making it easier to exit POS terminal contracts without incurring exit fees.
  • Making it easier for merchants to research and compare prices and options available to them.

The BRC believes the proposed remedies need to go much further:

“The BRC welcomes the review of the cards market by the UK payments watchdog. The PSR have conducted a thorough study that confirms the BRC warnings / findings that the benefits of legislation to reduce card fees have not been passed on to most retailers, and that the fees levied by the card schemes have been soaring for years. Yet retailers will be disappointed by the very modest solutions outlined in the report and the lack of proposed action on card scheme fees. There is clearly scope for the PSR to go much further in tackling the failures of the uncompetitive card market.”

The full interim report can be found on the PSR website

Next steps

The PSR are now consulting on the content of this interim report and the proposed remedies. The deadline for feedback is 8 December 2020.

The BRC will submit a response to this consultation following discussion with members.

The PSR will then finalise their findings and publish a Final Report in 2021.

Please get in touch if you have any questions.