Abta wants its members to submit any evidence of violations of Interchange Fee Regulation (IFR), introduced in 2016 to curb charges and require card payment providers to be more transparent about how their fees are constituted.
While IFR capped bank and merchant interchange fees at 0.2% for debit cards and 0.3% for credit cards, Abta says other fees have been increased or introduced to meet the shortfall - wiping out any savings to retailers.
The association’s call for evidence comes after its concerns about the high cost of taking card payments were recognised by economic secretary to the Treasury John Glen MP.
Former tourism minister Glen has now written to Abta to reassert his commitment to ensuring the UK’s financial services industry properly serves small businesses and stressed his support for the travel industry.
In his letter, he said Treasury officials would continue to engage with the industry and Payment Services Regulator (PSR) to monitor the effect of IFR, adding the PSR has been in touch with Abta to request its members share evidence of any breaches.
Mark Tanzer, Abta chief executive, said: “The travel industry is hit particularly hard when it comes to the cost of taking card payments – a point we have been making to the government for some time.
“We welcome the commitment by minister Glen for his department to work with industry and the PSR, to assess the effectiveness of the IFR.
“We’re encouraging members to share evidence with us of violations of the interchange regulation, so we can pass this onto the PSR to investigate.
“We are already in contact with the PSR, who have confirmed they are currently undertaking compliance checks around the IFR and considering their priorities for the year ahead. We will continue to work closely with the government and the regulatory authorities to ask that card charges are reduced to a reasonable level.”
Abta said evidence that could underpin any violations may include:
- Non-compliance with the IFR rates of 0.2% for debit cards, 0.3% for credit cards
- Lack of transparency relating to interchange rates being applied
- Failure to provide information on interchange fees at transactional level, if this has been specifically requested by the retailer
- Failure to provide information on card types, where this has been requested by the retailer
- Evidence of increases in other charges within the merchant service fees, such as scheme fees
Members should send any evidence of such malpractice to publicaffairs@abta.co.uk.
Additionally, Abta has been asked to help define the PSR’s priorities for 2018/19, and will urge the regulator to prioritise enforcement and make the card payments market more transparent, such as by ensuring greater examination of any additional card payment charges.
