Payment Systems Regulator Outlines Card Acquiring Market Solutions
The UK Payments Systems Regulator (PSR) has ordered 14 card acquiring providers to ensure small businesses are able to shop around and negotiate better prices and services, saving them thousands books per year.
Focusing on 14 providers, including heavyweights such as Barclays, Lloyds, PayPal, Square, Stripe and Worldpay, “will mean around 95% of transactions for merchants our remedies will protect will be regulated,” the PSR says.
There are around 157 million cards issued in the UK and 65% of all payments made by consumers in 2021 were made by credit or debit card, according to UK Finance.
Kate Fitzgerald, PSR’s acting head of policy, said: “The steps we are taking today will make it easier for the UK’s 1.5 million small and medium-sized businesses to compare prices and switch suppliers. , which will benefit them and their customers.”
In a market study, the PSR found that companies with an annual turnover of less than £50 million were not always fair when it came to card acquiring services, with some companies having struggling to compare prices and services or being locked into long contracts for card readers.
Among the specific guidelines outlined this week, which could save businesses up to £5,400 on fees per year, limit point-of-sale (POS) terminal contracts to 18 months, requiring providers to set costs in advance and to offer an online quoting tool to enable businesses to make more informed decisions.
Vendors also need to start incorporating trigger messages that remind businesses that their point-of-sale contract is nearing the end of its term and that they might get a better deal if they shop around.
The 14 companies have three months to implement the TPV contractual remedy, starting in January 2023, if applicable, and nine months from July 2023 to implement the disclosure remedies.
The PSR says it will monitor company compliance and the impact of corrective actions to determine if further action is needed.