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Debit and credit card issuers hike fees for UK shoppers buying from EU

By Don-Alvin Adegeest


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Times of uncertainty are often windows of opportunity, including Brexit. Credit card giant Mastercard has been called out by the Daily Mail for being opportunist for increasing fees for British shoppers using debit or credit cards to buy from EU-based companies. The increase is thought to be five-fold, according to a report.

Most credit cards will levy levy ‘interchange’ fees on behalf of banks for card payments that used their networks. These fees were capped by the European Union in 2015 to bring transparency the hidden costs of card issues and payment gateways.

Mastercard, according to the Mail, said the cap does not apply to some transactions following Brexit, as payments between Britain and the European Economic Area are now technically ‘inter-regional.”

The company will raise its credit card charge from Britain to the EU from 0.3 per cent of the transaction’s value up to 1.5 per cent from October 15, with debit card payment fees jumping from 0.2 per cent to 1.15 per cent.

Who will benefit?

British banks and card issuers will benefit from the increase in fees, which has since caused an outcry from companies who rely on online payments.

Chair of the all-party parliamentary group on Fair Business Banking, Kevin Hollinrake, told the Mail the change was ‘alarming’. “This smacks of opportunism and I would urge the regulators to step in as a matter of urgency to ensure that financial institutions do not use Brexit as an opportunity to hike up costs that consumers will ultimately bear.”

Head of policy at the Coalition for a Digital Economy, Joel Gladwin, said: “Some people might put this change down to Brexit, but it is actually just greed. It is well within the power of the card schemes to make merchants’ lives easy and keep things operating as they were pre-2021.”

Image via Pexels; Article source: The Daily Mail