Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of card-payment fees on independent retailers in Hamilton and Clyde Valley constituency.

The Government recognises the importance of ensuring that the cost of accepting payments, including cards, is fair to all parties, and that our payment systems work for all.

When a card payment is made, businesses will pay a fee to their merchant acquirer, which provide services that allow the business to accept card payments. These fees are made up of several components. This includes interchange fees, which are regulated by the Interchange Fee Regulations 2015 (IFR). The IFR caps these fees for consumer card transactions. The caps are currently set at 0.2% for every transaction using a debit card, and 0.3% for credit card transactions.

The Payment Systems Regulator (PSR), the UK’s economic regulator for payment systems, has also recently concluded two market reviews into card fees to assess if increases in certain card fees are fair and reflect a market that is operating well. This includes scheme and processing fees, which are paid by merchant acquirers directly to the card schemes, such as VISA and Mastercard. The PSR has recently issued directions to VISA and Mastercard, which require them to produce better evidence showing how they make pricing decisions for scheme and processing fees and to improve the transparency of the fees they are charging to merchant acquirers, which can then be passed onto businesses they provide services to.

The PSR is considering further remedies in relation to its market reviews, which it will set out in due course.