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Retailers in the UK and the EEA could now face an estimated £150m a year cost increase to accept cross-border card payments, with British retailers alone shouldering an extra £36.m, or £100,000 every day, the BRC has warned.
The research, by retail payments advisory firm CMSPI, in conjunction with the BRC and its members, revealed the “huge impact” of fee changes, which it said have risen up to 475% in some cases.
This increase is due to transactions between the EEA and the UK no longer being capped at the intra-regional rate, instead classed as inter-regional transactions.
The research also shows many of the UK’s closest neighbours face “rocketing” cross-border fees, with retailers in Italy, Germany and the Netherlands forking out over £53m between them.
It is also estimated that the new scheme fees will cost UK merchants £9.5m and EEA merchants £20.8m, on top of previous rises which saw major card brands double their scheme fees between 2014 and 2018.
The research also suggests these increased charges will “add to existing cost pressures” from rising commodity prices, wide scale labour shortages, and increased haulage and shipping costs, making it more challenging for retailers to absorb these new charges from card firms.
The BRC said it is calling on the Government and PSR to take action to “tackle these soaring card fees”, which cost retailers millions every year.
Andrew Cregan, payments policy adviser at the BRC, said: “At a time when retailers are facing rising costs across the board, from higher energy prices to soaring shipping charges, it is likely that some of these five-fold fee increases will eventually be passed on to hard pressed consumers.
“The Government and the Payment System Regulator need to urgently intervene to reverse these spiralling charges on cross-border trade. Without action, it is consumers who will pay the price for the lack of much needed regulation.”
