The Axe the Card Tax campaign has called to the UK Treasury and Payments System Regulator to review the cost of card payments to encourage fintech payment innovation.
The campaign reports that the average cost of a card payment to a retailer can be 0.7% on every payment, and they estimate a £5 billion annual card tax paid by British businesses.
Axe the Card Tax represents 240,000 businesses as well as trade bodies like Coalition for a Digital Economy (Coadec), Federation of Small Businesses, British Retail Consortium, Association of Convenience Stores, the Federation of Independent Retailers and the Charity Retail Association.
The campaign is calling for:
- The Payment Systems Regulator (PSR) to freeze all transaction fees until PSR investigations of the payment sector are complete.
- The PSR to reverse the 400% rise in cross-border interchange fees post-Brexit that was introduced earlier in 2022 by major card schemes.
- The UK Treasury to initiate its own review of the cost of accepting card payments in the UK.
- Regulation of alternative providers and clarity on the future of open banking so that retailers wanting to offer alternatives to card payments have certainty and transparency.
Charlie Mercer, head of economic policy at Coadec, says: “With the rise of digital tech over the last decade, you’d expect to see a variety of ways to pay emerging, but in reality only card payments have benefited. Cards have their place, but they’re not the only way to pay. High card payments fees incentivise banks to maintain the status quo, and the adoption of payment innovations like open banking will always face an uphill challenge whilst this remains the case."