The UK’s Payment Systems Regulator (PSR) published its proposed Strategy in June for the coming five years. The British Retail Consortium (BRC) response to the consultation can be found below (scroll to bottom), after the joint statement covered in today's news from the BRC, British Independent Retailers Association (BIRA), Association of Convenience Stores (ACS), Federation of Small Businesses (FSB), and UKHospitality. In the absence of effective proposals in the Strategy to tackle longstanding anti-competitive practices in card payments, we are calling for Parliamentary (Treasury Committee) intervention – for the Committee to assess the PSR and its proposed Strategy against its statutory objectives.

Urgent action is needed to protect businesses and customers from soaring card costs, yet there is a conspicuous absence of any meaningful commitment to address current harms within card payments despite substantial and increasing evidence of excessive and ever-growing costs to users – including evidence gathered by the PSR itself. The Strategy document conflates present day harms, for which action is overdue, as risks to be considered at some point in the future. No measurable outcomes have been defined and no timeframe established within which the PSR will intervene in the coming 5 years if competitive outcomes continue not to be seen.

More generally, the Strategy lacks essential details required for the PSR to hold itself to account, or for others to do so. There is an absence of specific, measurable and time-limited objectives that would make it difficult to assess the PSR’s success in achieving good outcomes.

As the PSR is accountable to Parliament, the BRC wrote to a handful of MPs with a briefing in May to request their help ahead of the publication of the PSR Strategy. Almost 40 Parliamentarians supported a cross-party action calling for robust regulatory measures on card fees in the PSR Strategy, including the regulation of payment card schemes fees and the abolition of interchange fees, yet this has not featured in the proposals.

Last year a UK Supreme Court ruling confirmed that Visa & Mastercard interchange fees are unlawful, creating a considerable anomaly that the PSR continue to allow such fees and have not directly addressed the pressing matter of anti-competitive card fees in its future Strategy.

The thousands of British businesses that we all represent were depending on the PSR Strategy to include long-awaited measures to tackle excessive and ever-increasing card costs which ultimately add to the price of goods and services paid by consumers. It isn’t here. The BRC, BIRA, ACS, FSB & UK Hospitality are all asking Parliament's Treasury Committee to steer the PSR towards thinking again. 


10 September 2021

·        Bodies representing thousands of UK businesses call for action to tackle anti-competitive practices in card payments

·        Parliament called on to intervene and protect businesses and customers from soaring card costs

·        Consultation closes today on UK payment regulator’s five-year Strategy

A group of trade bodies representing tens of thousands of businesses across the retail and hospitality sectors are appealing for Parliament to intervene to protect British businesses and consumers from the mounting cost of anti-competitive practices in card payments.

The British Retail Consortium (BRC), British Independent Retailers Association (BIRA), Association of Convenience Stores (ACS), Federation of Small Businesses (FSB), and UKHospitality say immediate action must be taken to tackle soaring card fees which add to the price of goods and services.

The call comes as the UK’s Payment Systems Regulator consultation on its five-year Strategy closes today. The group says that the national regulator – accountable to MPs – is failing to meet its statutory objectives and that its new Strategy is a 5 year license to deliver very little.

Since the pandemic, British businesses and their customers have become more dependent on card payments than ever before, with more customers shopping online or paying by card in store. Cards now constitute more than 80% of UK retail sales, with Visa and Mastercard accounting for 99% of card transactions. Retailers spent £1.3 billion in 2020 to accept payments from their customers and ultimately these costs, equivalent to more than £46 per household, will be passed onto the consumer.

BRC, BIRA, ACS, FSB and UKHospitality came together in a similar joint call last year but no action has so far been taken by the Regulator. This time the trade associations are calling on Parliament and its Treasury Committee to urgently intervene. Nearly 40 cross-party MPs have already written to the Regulator this year calling for robust regulatory measures on card fees.

Last year, the UK Supreme Court ruled that Visa and Mastercard interchange fees are unlawful. The UK should not continue to allow such fees and the Regulator must directly address anti-competitive card fees in its future Strategy.

Andrew Cregan, Head of Finance Policy, British Retail Consortium said:
“Our national regulator is proposing vague and distant goals for tackling today’s payment problems and it’s far too little, too late. The Treasury Select Committee should conduct an appraisal of the PSR’s effectiveness and the value of this Strategy.”

David Sheen, Public Affairs Director, UKHospitality said:

“This so-called strategy from the regulator does little to address the distortions in the payment market that results in higher costs for business and higher prices for consumers.

“We need a clear plan of action to introduce more competition and oversight to the market. This should be a priority as the country recovers from its unprecedented shock, and where card payments have become even more central to our economy.”

Jeff Moody, Commercial Director, British Independent Retailers’ Association said:

“Following the UK’s departure from the European Union, the UK Government and its regulator have yet to address new opportunities for anti-competitive behaviour and abuse of the card schemes dominant market position in Europe’s largest card payments market. The PSR is tackling the area of future Payments but we also need to focus on the current payments issue where card-based transactions constitute at least 80% of retail payments today.”

FSB National Vice Chair Martin McTague said:

“With the shift to contactless accelerating, card transaction charges are weighing heavily on small businesses as they look to recover from 18 months of disruption. The Payment Systems Regulator should be doing more to address the surging fees charged by a handful of providers. Interchange regulation means little if card companies have free rein to increase other fees, fees which often hit the small firms that make-up 99% of our business community. Greater parliamentary scrutiny of the PSR’s work should help to spur the regulator to set more measurable, concrete aims.” 

James Lowman, Chief Executive, Association of Convenience Stores said: 
“Convenience retailers play a crucial role in offering customers a breadth of payment options and providing access to cash for consumers in communities right across the country. The Payment Systems Regulator is right to prioritise securing long-term access to cash through its work with the LINK ATM network and encouraging innovation to reduce processing costs for retailers, which are ultimately shared with customers too.”

“The PSR is now an established regulator and must act to prevent excessive increases in card scheme fees for debit and credit cards. The card acquirer review is a positive step but needs implementing so that retailers can shop around and switch card payments providers, securing the best deals for them and their customers.”


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About the British Retail Consortium
The BRC’s purpose is to make a positive difference to the retail industry and the customers it serves, today and in the future.

Retail is an exciting, dynamic and diverse industry which is going through a period of profound change. The BRC is committed to ensuring the industry thrives through this period of transformation. We tell the story of retail, work with our members to drive positive change and use our expertise and influence to create an economic and policy environment that enables retail businesses to thrive and consumers to benefit. Our membership comprises over 5,000 businesses delivering £180bn of retail sales and employing over one and half million employees.

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