Daily Mail

£1bn assault on the High Street

Shopkeeper­s suffer as Visa hikes fees on card payments

- by James Burton

SHOPKEEPER­S must pay £1bn extra a year to payments giant Visa after it hiked fees.

The increase comes as shops face a boom in customers who want to pay by card for even the cheapest items.

But what many don’t realise is that every transactio­n costs the retailer, and Visa has been accused of cashing in, by hiking its fees.

Experts warned that some small retailers will see their bills more than double and some could even shut. Payments consultant CMSPI said that increased card costs will hit Europe’s shops for £2bn.

And in the UK, which has embraced contactles­s cards and chip and pin, the bill will be £1bn.

Visa Europe has doubled charges since 2015 from an average 4p per transactio­n to 8p, says CMSPI. It used to keep just 1.5p of this as profit but now takes 5p after cutting costs, the consultant said.

CMSPI chief executive Brendan Doyle said: ‘This is incredibly disappoint­ing. Visa, a multinatio­nal that consistent­ly reports profit margins in excess of 50pc on multi-billion- dollar revenues, is piling cost after cost onto retailers and the latest change will be particular­ly hard on struggling small businesses.’ He added that CMSPI will complain to the European Commission about the hike.

Visa has become more aggressive since it was bought by its US sister firm for £15bn in 2016.

Until then, Visa Europe had been owned by banks, including Lloyds and Royal Bank of Scotland, and they made billions from its sale to namesake Visa Inc. The American company’s chief executive Charles Scharf plotted to hugely increase fees – in 2015, he said he hoped to ‘expand yields in Europe’. MPs and business groups called for regulators to step in.

SNP MP Stewart Hosie, of the Treasury Select Committee, said: ‘It’s a scandal card issuers’ fees have increased massively. I would hope and expect card issuers would think again before they impose these costs.’ Meanwhile, High Street retailers face average hikes for UK card fees of 75pc, and other European card costs will come close to trebling with an increase of 189pc.

James Lowman of the Associatio­n of Convenienc­e Stores said: ‘We encourage the Payment Systems Regulator to look closely at these fees to ensure fairness.’ Andrew Cregan, at the British Retail Consortium, also backed interventi­on by the regulator.

Visa said: ‘The figures quoted are misleading and over-inflated. Our pricing means we can invest in world-leading cybersecur­ity and consumer protection, in innovation such as contactles­s and mobile payments, and in providing a global network which enables billions to make purchases safely, securely and reliably.’

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