British retailers’ priorities for payments
16 December 2013
British retailers have been calling for a fair, transparent and competitive
payments market and a reduction in excessive fees charged by banks to
process card payments, which can be particularly detrimental to small
businesses who invariably pay the highest fees.
The European General Court has now ruled that interchange fees1 are
anti-competitive.
The UK represents a third of the European payments market and we
therefore welcome the European Commission’s recent proposal as an
important first step to regulate these fees by imposing a maximum cap at
0.2% and 0.3% respectively for consumer debit and credit cards and the
abolition of the ‘honour all cards rule’ that forces us to accept all cards
irrespective of cost.
MasterCard claim that any reductions in fees will simply increase our
profits. This is wrong.
The market in which we operate is highly competitive. We compete on
price and value every day and put our customers at the heart of
everything we do. Any savings in a reduction in card interchange fees will
create capital to enable a range of investments to be made such as,
investing in new store designs; improving customer service propositions;
extending the range of products available; investing in technology to
improve the customer shopping experience (multichannel, mobile);
expanding our commercial footprint through new stores; and crucially,
enabling small businesses to compete more effectively.
The window for change is limited: with European parliamentary elections
and a new European Commission in the middle of 2014, change needs to
come now.
We therefore call on UK Government, UK and European MEP’s to follow
the lead of other member states and put their full weight and support
behind the comprehensive and carefully considered regulatory proposal
published by the European Commission. Any dilution of its content will
simply allow these excessive costs to continue, remove transparency and
result in a lack of proper competition within the banking sector.
Interchange fees are charged by a cardholder's bank (the 'issuing bank') to a merchant's bank (the
'acquiring bank') for each sales transaction made at a merchant outlet with a payment card.
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This letter is signed by the following retail CEOs:
Sir Ian Cheshire, Group Chief Executive, Kingfisher and Chairman, British
Retail Consortium
Justin King CBE, Chief Executive, Sainsbury’s
Marc Bolland, Chief Executive Officer, Marks and Spencer
Andy Clarke, Chief Executive Officer , Asda
Dalton Philips, Chief Executive Officer, Morrisons
Lord Wolfson, Chief Executive, Next
Terry Duddy, Chief Executive , Home Retail Group
Andy Harrison, Chief Executive, Whitbread
Simon Roberts, Managing Director, Boots UK and Ireland
Sebastian James , Group Chief Executive, Dixons Retail
Steve Clarke, Chief Executive, WH Smith
Tim Steiner, Chief Executive Officer, Ocado
Roger Whiteside, Chief Executive Officer, Greggs
Debbie Robinson, Managing Director, SPAR UK Limited
Alan Hawkins,
Association
Chief
Executive
Officer,
British
Independent
Carol Paris, Director General, Horticultural Trades Association
Helen Dickinson, Director General, British Retail Consortium
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Retailers