March BRC Finance Community Call - summary

The March meeting of the BRC Finance Community call focused on three areas: the Financial Conduct Authority’s review of card acquiring remedies, the rollout of refund authorisation requirements from Visa and Mastercard, and recent changes to contactless payment limits.

FCA Card Acquiring Market Review

The Financial Conduct Authority (FCA) is currently undertaking a post-implementation review of remedies introduced in 2023 to improve transparency and competition in the card acquiring market. These measures were designed to address long-standing issues such as opaque pricing, low switching rates, and restrictive contract terms.

Key interventions included summary pricing boxes, online quotation tools, contract renewal reminders, and limits on terminal contract lengths.

What members are seeing in practice

Discussion highlighted that, while the remedies address genuine market issues, their impact has so far been limited—particularly for larger retailers. Most large organisations already rely on structured procurement processes and direct negotiations with acquirers, meaning the newly introduced tools are rarely used.

Engagement across the wider market also appears inconsistent. Members noted that although the remedies are more relevant to SMEs, awareness and usage remain low. Concerns were also raised that the review’s scope may not fully capture the diversity of the acquiring market.

At the same time, members are continuing to explore new payment models. Some are trialling SoftPOS and mobile-based solutions for greater flexibility, while many retain unbundled models separating POS, PSP, and acquiring services. Suppliers, however, are increasingly promoting bundled “one-stop” offerings.

Overall, the remedies have yet to deliver meaningful change at scale. Their effectiveness appears constrained by limited awareness, low utilisation, and potentially narrow market coverage.

Action for members

• Share feedback with BRC on SME awareness and usage of FCA remedies
• Provide evidence on switching behaviour and pricing transparency
• Contribute insights before the FCA’s stakeholder engagement closes in May 2026

Refund Authorisation Mandate

The introduction of mandatory refund authorisation by Visa and Mastercard generated the strongest feedback during the session. The mandate requires refunds to be authorised in the same way as payments, with the aim of improving transparency and processing efficiency. However, members reported widespread operational disruption and customer experience issues following implementation.

Key challenges reported

Members highlighted a range of issues affecting both online and in-store transactions:

• Elevated refund decline rates, in some cases reaching double digits
• Issuers declining refunds using payment-related logic (e.g. fraud checks, “do not honour”)
• Customers not receiving refunds, leading to confusion and increased chargebacks
• Operational strain due to manual intervention and customer follow-up

In-store environments have been particularly affected, with some retailers unable to complete refunds at the point of service and needing to offer alternative methods such as cash or different cards.

A consistent theme was that issuers are not handling refund authorisations appropriately, applying payment logic to fundamentally different transaction types.

There was strong consensus that this is not an isolated implementation issue but a systemic one. While the mandate applies to acquirers, members observed that issuer readiness and alignment appear insufficient. As a result, some retailers have delayed implementation, sought waivers, or temporarily disabled the functionality altogether.

In its current form, the mandate is widely viewed as premature and not fit for purpose. It is creating poor customer outcomes, increasing operational costs, and raising chargeback risk. Members expect the issue to escalate as waivers expire and adoption widens.

Action for members

• Continue engaging with acquirers and card schemes on implementation challenges
• Collect and share data on:
• Refund decline rates
• Customer experience impacts
• Operational costs and manual interventions
• Escalate issues internally where appropriate and consider applying for waivers if needed

Next steps

• BRC to raise the issue with UK Finance
• Explore a coordinated industry response, including stakeholder engagement and potential escalation

Contactless Payment Limits

Recent regulatory changes now allow for increased—or even removed—contactless payment limits, offering greater flexibility for issuers and merchants. Despite this change, members reported no immediate plans to increase contactless limits. Issuers also appear to be holding back from implementation.

The general view is that customer demand is limited, particularly given the widespread adoption of mobile wallets, which already provide a seamless alternative for higher-value transactions.

Members also raised concerns about potential customer confusion if limits vary between retailers, as well as the operational burden on store staff.

For now, this is seen as a low-priority development with limited immediate benefit. Most organisations are opting to monitor the market rather than take action.

Action for members

• No immediate action required
• Continue to monitor issuer activity and customer demand
• Share any emerging use cases or customer feedback with the BRC

BRC Payments Survey

The BRC payments survey remains a critical tool for building the evidence base needed to support regulatory engagement, including advocacy on scheme fees.

Recent improvements have reduced the data burden and adjusted timelines to better align with members’ reporting cycles.

Why it matters

Survey participation directly impacts the strength and credibility of the industry’s voice in discussions with regulators and policymakers.

• Action for members
• Complete the payments survey by 26 May
• Ensure submissions are as complete and accurate as possible
• Encourage relevant colleagues to contribute where needed