Calls for card charges to be reduced

09 February, 2007

The British Retail Consortium is calling for banks to reduce "excessive charges" on credit and debit cards.

The trade body has spoken out after the European Commission's inquiry into the sector revealed credit card issuers make an average of 40 per cent profit from transactions.

The inquiry found some practices could harm retailers - such as "blending" of card fees, which means retailers are charged the same merchant fee irrespective of the different costs of card types . It also said the present level of interchange fees (bank fees charged to retailers for accepting card payments ) is not justified.

B RC director ≠general Kevin Hawkins said: "This report is a welcome indication that the Commission agrees with us that banks are abusing their position. The report sends a clear signal to member states, including the UK, that consumers and retailers have been bearing the costs of that abuse."

He added: "The Commission's findings strongly back the BRC's position in the OFT case against Mastercard and Visa. The OFT must acknowledge them and press ahead to bring an end to the anti-competitive behaviour that has gone on far too long."

Visa Europe - one of the companies examined in the report - defended the use of interchange fees. President Peter Ayliffe said the banning of interchange fees "could lead to the end of cards for all, as costs for consumers would increase".

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