Urgent action needed to improve the card payments market, says ACS

The regulator is consulting on an interim report for its review into the supply of card acquiring services. The report makes a number of proposals:

• Requiring retailer contracts with acquirers to have an end date to prompt comparisons within the market.
• Changing POS terminal hardware contracts to have a limited length, not auto-renew, and be able to exit without excessive fees.
• Making it easier for retailers to research and compare prices via price comparison platforms.

In its submission, ACS said it supported these interventions, while going further to recommend the overall merchant service charge seen by retailers includes all fees associated with accepting card payments, due to a proliferation of new fees making it harder to compare and switch.

The submission also calls on the PSR to investigate the potential circumvention of the interchange fee regulation, which capped interchange fees paid to banks, via rapid increases in scheme fees paid to card schemes such as Visa and Mastercard.

ACS chief executive, James Lowman, said: “Convenience retailers have invested in their stores to provide their customers with the freedom to use a range of different payment methods.

“However, the cost of accepting these payment methods has continued to increase, making it more difficult for retailers to provide a range of payment options to their communities. The government needs to introduce practical measures to make it realistic for retailers to compare and switch acquirers. This would ensure the market works for retailers, and ultimately consumers.”