The SRP wishes to frame the scheme fees
The SRP (Payment Systems Regulator) recently published an article highlighting a significant increase in business transaction fees imposed by the schemes. The regulator stresses that this increase can have a significant impact on companies, and intends to defend their interests. Recommendations to improve the transparency of fees could therefore be issued by the agency in the near future.
FACTS
The SRP (Payment Systems Regulator) published last week an in-depth report on the state of the UK card system market, including the costs associated with processing the system.
In order to build its report, the SRP collected information from 17 buyers, representing 90% of the value of Visa and Mastercard transactions in the UK in 2023.
The SRP findings show that companies have experienced a significant price increase in recent years.
According to the report, the processing costs of the two US schemes have increased by almost 25% since 2017. According to the organization, this increase would have cost companies at least £170 million more per year.
In addition to this significant increase, the SRP blames a lack of transparency with respect to the costs and reasons for these increases.
Although the schemes contest what they are accused of, they justify this increase in prices, in particular by a significant innovation in the services offered, security or the fight against fraud.
In the near future, the SRP is expected to publish recommendations for action to be taken to improve the transparency of the fees charged by the schemes.
ISSUES
Protecting the Card Market: Because of the popularity of cards in the UK, the SRP wants to ensure that the market is transparent and functioning. In addition to this, the organisation wants to ensure that the conditions applied between the various actors are fair, whether for chemists or traders. Indeed, the UK card market is in a duopoly situation with the almost exclusive presence of Visa and Mastercard. While this situation is now inevitable, the publication of this report shows the regulator's willingness to protect network users such as merchants.
Loss of profits for English companies: If the organization wishes to propose management measures, it is also because of the loss of profits for English companies. The rise in chem price is not without impact and significantly reduces the performance of enterprises. This limits gains and inevitably limits investment, development, etc.
PERSPECTIVE
While the trend in Europe and the United States is focused mainly on consumer protection, SRP action shows that the defence of business interests is also essential, especially in a strategic market such as payments.
At the same time as the publication of this report, actors such as Visa have also announced that they want to challenge the SRP's actions, in particular with regard to a plan to cap fees charged by Schemes to English merchants when European consumers purchase from their site.
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