New card rules could squeeze customers with higher charges

Marion Dakers
SHOPPERS in Britain could be charged a fee to hold a credit or debit card as a result of proposed changes to payment rules, a report out yesterday claimed.

A paper commissioned by Mastercard found that the European Commission’s plans to ban or cap the so-called interchange fee paid by retailers’ banks to card issuers would cost the latter £2.4bn in lost revenues.

The changes would save large retailers around £2.2bn but the report, written by Europe Economics and the University of Essex, argued that there is no evidence this saving would be passed down to customers.

Last month, Mastercard made a final appeal against the European Commission’s ban on cross-border card fees, contesting a 2007 decision that such charges broke competition rules and led to higher charges for customers and retailers.

“The British are used to, and like, free banking,” Richard Koch, head of policy at The UK Cards Association, said.

“The Commission’s model would impact on the card issuers’ ability to continue that,” he added.