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It is extremely positive to see that following our persistent efforts HM Treasury has acknowledged the impact that debit card charges are having on the retail automotive industry and confirmed that they will review the issue over the coming months.
The EU Interchange Fee Regulation (IFR), which took effect throughout 2015 and 2016, imposed a new structure for fees charged by card processing companies. Debit cards fixed per transaction fees were replaced by percentage fees similar to credit cards’ ones. At the same time, the 50p cap on debit card payments was removed.
NFDA wrote to HM Treasury in July to outline the impact that the increase in debit card fees is having on our members – HM Treasury has responded.
The NFDA highlighted that with the focus of the new system placed on value, rather than volume of transactions, the new system is negatively affecting some industries more than others. Businesses trading in high value goods, such as cars, are facing significant extra costs which are difficult to absorb.
It is encouraging to see that HM Treasury has recognised the importance of the franchised retail automotive industry and that the Government is ‘committed to supporting important industries, like the franchised dealers sector’.
NFDA is now looking forward to further engaging with HM Treasury and the Payment Systems Regulatory to help investigate the issue.
A copy of the letter is available from the press office