Recent figures show that card fees are costing UK businesses at least £170 million per year.
These numbers come from the Payment Systems Regulator’s final report from its market review of card scheme and processing fees, and as a result, it has said it will address the issues identified.
Commenting on this, Tina McKenzie, Policy Chair, Federation of Small Businesses (FSB), said, “The finding from the regulator that card fees cost business at least £170 million per year is not a surprise to small businesses, but it illustrates one of the unavoidable cost pressures they are facing.
“With just two giants now controlling over 95 per cent of UK card transactions, both are ‘must-takes’ for small retailers. The lack of downward competitive pressure on the supplier side allows fees to rise, but these hit small business growth and investment and feed through into higher prices.”
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Tina added, “Every form of payment comes with its own pros and cons, but with card payments from just two dominant providers taking such a huge slice of the market, small firms often feel they have no choice but to accept them, even when it means their margin takes a direct hit.
“To boost economic growth, small businesses will now look to the regulator to impose remedies such as caps on fees. This would control costs for small business merchants in the short to medium term while other steps are taken to increase competition in the cards market, but also more broadly in the area of payments and cash.”
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