Abta members urged to expose violations of new bank charge rules

Abta members urged to expose violations of new bank charge rules

Travel agents are being encouraged to submit evidence of violations of the Interchange Fee Regulation.

The IFR was intended to reduce overall charges and requires card providers to be clear and transparent about the constitution of charges.

The call from Abta follows a “constructive” letter received from economic secretary to the Treasury, John Glen MP, in response to the concerns raised earlier this year around the high cost of taking card payments, especially for agents.

The minister recognised that retailers could incur additional costs and affirmed his commitment to ensure that the financial services industry delivers for small businesses, as well as consumers.

Former tourism minister Glen also declared his support for the travel industry, recognising the sector as an integral part of the UK economy.

He acknowledged the travel association’s concerns about the IFR, which intended to tackle the high charges made by banks and other merchant providers to process card payments.

While the regulation succeeded in capping the interchange fee at 0.2% for debit cards and 0.3% for credit cards, other fees appear to have been increased or introduced that have minimised or wiped out retailer savings in relation to overall card charges.

Treasury officials have been instructed to continue to engage with the industry and the Payment Services Regulator (PSR) to assess the impact of the IFR.

The PSR has also been in touch with Abta to request evidence of breaches.

Abta is now urging members to share any evidence relating to:

• 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 fee (such as scheme fees).

Abta chief executive Mark Tanzer 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 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 Interchange Fee Regulation.

“We’re encouraging members to share evidence with us of violations of the Interchange Regulation, so we can pass this onto the Payment Services Regulator 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 is urging the regulator to prioritise effective enforcement, and greater transparency in the card payments market.

The association is calling for a detailed examination of how acquirers and issuers apply additional charges, as well as concrete measures to enforce IFR provisions around the sharing of information on card types, which would enable retailers to correctly identify whether cards are consumer or corporate cards at the point of sale.


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