The European Commission is being urged by some of the UK’s top retailers to cap the ‘excessive’ fees charged by banks for processing card payments.
In the lead-up to a debate on the issue, 13 executives of large UK retailers including Sainsbury’s, Marks & Spencer, Asda, Kingfisher, Morrisons,Home Retail Group and Boots, have signed a letter to MEPs asking them to reduce card fees.
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"The market in which we operate is highly competitive," claimed the retailers, "We compete on price and value every day and put our customers at the heart of everything we do.
"Any savings in a reduction in card interchange fees will create capital to enable a range of investments," the letter reads.
The European Commission has drawn up plans to limit processing fees to 0.2% for debit cards and 0.3% for credit cards.
With UK fees ranging from 0.1%up to 2.5%, the new charges would save retailers an estimated £362m each year.
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By GlobalDataThe plan also includes the scrapping of the ‘honour all cards’ rule, according to which retailers must accept all major cards.
In their letter to the MEPs, the chief executives warned: "any dilution of [the proposals] will simply allow these excessive costs to continue, remove transparency and result in a lack of proper competition within the banking sector."
According to the British Retail Consortium (BRC), a trade association covering the entire retail industry, processing fees on credit and debit cards cost retailers in the country £850m each year.
The BRC has said that the policy risks being "significantly" delayed unless progress is achieved before the next European election.
Helen Dickinson, director general of the BRC, commented: "We are now extremely concerned that this vital initiative is at risk.
"Here in this letter we have an important coalition of some of Britain’s biggest retailers, united in support of this important reform.
"The window for change is limited and with European parliamentary elections and a new European Commission in the middle of 2014, change needs to come now," she concluded.
From the card issuers’ side, providers Visa and Mastercard criticised the proposals, expressing scepticism at the idea that retailers would pass savings on to customers.
The Commission is set to debate the issue in Brussels on 17 December 2013.
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