The UK's payments watchdog has set out new rules designed to inject more competition into the market for card acquiring services.
The consultation follows a review published in November which found that the supply of card-acquiring services does not work well for merchants with annual card turnover up to £50 million. These merchants could make savings by shopping around or negotiating with their current supplier, but many do not.
Under the PSR's proposals, service providers will need to be more transparent about their pricing, providing summary information boxes setting out key price and non-price service elements of card-acquiring services. Information about contract renewals should additionally be made using an agreed standard of messaging that will help merchants better understand what they are signing up for.
The regulator is also calling for the introduction of price comparison tools for merchants so they can see whether they are getting the best deal.
Finally, the watchdog wants to address barriers to switching between card-acquiring services, which arise from Point of Sale (POS) terminal leases, by looking at potential options for merchants to switch without incurring undue cost or suffering inconvenience. This may include the replacement of terminals by POS terminal lease providers for instance.
Genevieve Marjoribanks, head of policy at the PSR says: “In our recently published strategy, we highlighted our focus on competition in payments. This work ties directly into our strategy because the proposed remedies will help merchants find the best deals to use card-acquiring services at the most competitive tariffs for them - and give greater transparency to merchants in what can sometimes be a complicated area, particularly for smaller merchants.”
The PSR is seeking feedback on its proposed remedies and also invites industry to develop and submit detailed specifications for the potential remedies discussed, as well as any alternative suggestions. The close date is 6 April 2022.