And you think cable and broadband services bills lack clarity? Then don’t look at card transaction processing fees paid by merchants to acquirers. So now UK regulators are attempting to add transparency to the billing statements as the following article relates.
Companies operating in the UK are set to get improved transparency around card payment fees, following draft guidance published today by the Payment Systems Regulator (PSR).
The draft guidance sets out how the regulator will monitor and enforce newer elements of the EU Interchange Fee Regulation (IFR) which come into effect in June this year(1). It explains that acquirers – companies that process card transactions on behalf of merchants – must clarify what costs make up the fee for each transaction, known as the Merchant Service Charge (MSC).
The MSC essentially packages up several costs charged for each card transaction and passes them onto the merchant in one fee. However, acquirers are not currently required to explain to a merchant what makes up this charge.
Today’s draft guidance also considers the approach to co-badged cards (cards, popular on mainland Europe, that have two or more payment options on the same card) and requirement for electronic and visual identification on all credit and debit cards.
In addition, the draft guidance also explains that all retailers clearly identify at the shop entrance and point of sale which credit and debit cards they accept, in order to give increased clarity to customers. Today’s draft guidance on the IFR can be found on the PSR website here. The PSR is requesting feedback on the consultation to be submitted by 5.00pm on Friday 8 July 2016.
Not only are merchants unhappy about the fees they pay to card processors, but trying to decipher the billing statements adds fuel to the fire. The UK’s Payment Systems Regulator (PSR) would alleviate some of the pain with proposed guidelines so merchants can better understand specifically what they are paying for. Merchants and acquirers continue to have an adversarial relationship—maybe having a clear and straightforward billing process is something everyone can agree on.
Overview by Raymond Pucci, Director, Research Service at Mercator Advisory Group
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