UK retailers have today welcomed an historic court ruling to end the excessively high fees retailers pay banks to process card payments (known as interchange fees).
Today’s judgement by the European Court of Justice comprehensively and decisively supports retailers’ decade-long campaign for a more competitive payments system and a reduction in unjustifiably high card fees, which cost UK businesses £1 billion a year, which would otherwise be invested in further improving value for the customer.
This ruling provides further support for on-going European regulatory developments to set a cap for interchange fees, for the benefit of businesses of all sizes and their customers.
"We are delighted with this historic ruling," says Helen Dickinson, director general of the British Retail Consortium. "Capping these excessive and anti-competitive fees will support the UK retail industry and others, boosting our ability to invest and innovate while continuing to deliver lower prices and value for customers."
While retailers welcome the ruling, the UK is already falling behind other European countries that have introduced more immediate domestic caps and provided much needed redress for their retail businesses. France, Spain, the Netherlands, Poland, Romania and Hungary have started or already taken action - as have the USA, Australia and Canada outside of Europe.
Helen Dickinson continued: "While this is great news, the UK risks falling behind other countries who have already chosen to act to reduce the anti-competitive costs of interchange fees at a domestic level. There is a real opportunity for the Government and Payment Systems Regulator to go further and faster by taking more immediate action in the UK so that British consumers benefit as quickly as possible."
With other countries taking a more proactive approach the UK needs to catch up urgently as failure to keep pace is harming UK companies’ ability to compete in Europe, because it costs them more to do business as a result. This is especially bad for small and independent businesses, undermining UK competitiveness, investment in jobs and the Government’s Digital Economy agenda.
Fifteen retail chief executives, representing a third of UK retail sales, recently wrote to the newly created Payment Systems Regulator, requesting it to act without further delay. These excessive costs cannot be allowed to continue to delay the introduction of effective competition in the banking sector, to the detriment of businesses both large and small.