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Retailers demand action on rising card fees after new report shows squeeze on businesses

Retailers protest rising card fees

Card payment at grocery store

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A leading retailers' body has called for interim pricing remedies to reduce card fees after a recent report showed that leading credit cards have been consistently increasing their processing fees, squeezing businesses' ability to invest and grow.

British Retail Consortium (BRC) today (6) raised a demand to introduce interim pricing remedies to reduce fees which have been an unjust burden on merchants, and work towards the introduction of a price cap in the longer term.


According to a report by Payment Systems Regulator (PSR), Mastercard and Visa increased their core scheme and processing fees to acquirers by at least 25 per cent since 2017, costing businesses at least £170 million extra per year.

This increased cost of doing business in the UK impacts on UK businesses’ ability to invest and grow, and could lead to direct economic constraints, particularly for small merchant, states the report.

In addition, a lack of easy-to-understand fee information has led to costs for acquirers and merchants, including small retailers.

The report also notes that existing alternative payment methods to cards do not exert effective competitive constraints on the fees charged by Mastercard and Visa for scheme and processing services.

Cards are the most popular way for consumers to pay for goods and services in the UK. In 2023, 61 per cent of all payments in the UK were made using cards, making up almost 86 per cent of the total value of retail transactions.

Data from BRC shows that in 2023 consumer credit and debit cards accounted for 85.7 per cent of the total value of retail transactions in the UK.

In 2012, cash was the most popular method of payment. However, since then, the use of cash has declined substantially, while cards have grown and are expected to grow even more.

Mastercard and Visa are central to this; over 95 per cent of transactions using UK issued cards are made on their rails.

However, merchants have been raising concerns about the cost of accepting cards and their limited ability to understand or negotiate fees.

Chris Owen, Payments Policy Advisor at BRC, said, "This report confirms the harms arising from the lack of competition in the card schemes market, with fees being introduced without justification or sufficient explanation.

"There has been a 25% increase in scheme fees since 2017 costing businesses an extra £170 million per year. It’s now time for meaningful action. Following the PSR’s findings, it is clear it must go further than the proposed remedies in its interim report.

"This means introducing interim pricing remedies to reduce fees which have been an unjust burden on merchants, and working towards the introduction of a price cap in the longer term."