UK watchdog pushes for more transparency in merchant service charges
UK companies are set to get better transparency around card payment fees.
The UK companies are set to get better transparency around card payment fees, after draft guidance published by the UK’s Payments Systems Regulator (PSR).
The draft guidance sets out how the watchdog will monitor and enforce new elements of the EU Interchange Fee Regulation (IFR), which will come into effect in June this year.
It explains that acquirers must clarify what costs make up the fee for each transaction, known as the merchant service charge (MSC).
PSR said that the MSC packages up numerous costs charged for each transaction and pass them onto the merchant in one fee. However, acquirers are need not required to explain to a merchant what makes up this charge.
PSR managing director Hannah Nixon said: “The lack of clarity as to what is included in the merchant service charge means that companies find it harder to negotiate on fees and are less likely to see reduced costs passed on to them. In turn, merchants cannot then pass these savings to their customers.”