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United Kingdom Technology

UK Lawmakers Tell Visa and Mastercard To Justify Fee Rises (reuters.com) 59

Posted by msmash from the good-call dept.
A committee in Britain's parliament has told payment firms Visa and Mastercard to justify recent rises in their card transaction fees after the country's payments regulator expressed concerns. From a report: The Payment Systems Regulator (PSR) told the Treasury Committee last week that the increases in card fees showed the market was "not working well", according to correspondence published by the committee on Thursday.
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UK Lawmakers Tell Visa and Mastercard To Justify Fee Rises More

UK Lawmakers Tell Visa and Mastercard To Justify Fee Rises

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  • Their likely reply: (Score:5, Interesting)

    by luvirini ( 753157 ) on Friday July 15, 2022 @01:46PM (#62706130)

    "Because we can again"

    • Re:Their likely reply: (Score:5, Interesting)

      by gosso920 ( 6330142 ) on Friday July 15, 2022 @02:00PM (#62706184)
      "We have an obligation to our shareholders" is another acceptable response. As well as, "Fuck you, pay me!"
      • yes but it's not legally the only obligation in civilised nations , So it's not a legal shield.

      • "We have an obligation to our shareholders"

        "Obligation in which way?" they might ask in response.

      • Re: (Score:2)

        by mjwx ( 966435 )
        UK Lawmakers: OK, we've done our bit in helping this duopoly control most forms of payment, now I'm sure they'll never screw us.

        Visa and MC: I'm altering the fees.

        UK Lawmakers: erm...

        Visa and MC: Pray I do not alter them again.

    • Re: (Score:3)

      by Malc ( 1751 )

      Perhaps a case for changing who pays the transaction fees: instead of the merchant, put it on the card holders bill. Many banks already do this for foreign transactions. This would make it more transparent, make it easy for consumers to shop around and put pressure on these companies to control their fees. With so much of the world going cashless, these fees basically put the price of all consumer goods up.

      • Re: (Score:2)

        by fermion ( 181285 )
        The merchant has to pay it. To the retailer, the credit card providers are a cartel. The merchant has few real choices. On the consumer side the credit card companies can compete on interest rates. Competition has all but eliminated yearly fees which used to be common. If all the cards started charging a 1% transaction fee that would lead to an investigation over collusion.
        • Competition did not eliminate yearly fees, they simply pushed it onto the merchant's fees which the customer can not see because transparent per-transaction fees would make credit card users stop using credit cards (as much).

          Transparent per transaction costs itemized on the customer's receipt would fix the hidden fee problem. And no it would not be a problem for merchants to implement this - taxes are already easily handled as a line item.

          The reason the transaction cost is hidden is because card compa

          • It cost companies money to deal with physical cash and physical cash on hand can be stolen easier by employees. Also, the card companies love it if you use their card for all your transactions because that's data they can utilize and likely sell.

            I'm of two minds about who should pay the transaction fee. On the one hand, we have the status quo which is to let businesses pay for the transaction fees. They are free to limit purchases to a minimum threshold or add a small charge for using a credit card right at

          • Re: (Score:3)

            by tlhIngan ( 30335 )

            Competition did not eliminate yearly fees, they simply pushed it onto the merchant's fees which the customer can not see because transparent per-transaction fees would make credit card users stop using credit cards (as much).

            Transparent per transaction costs itemized on the customer's receipt would fix the hidden fee problem. And no it would not be a problem for merchants to implement this - taxes are already easily handled as a line item.

            The reason the transaction cost is hidden is because card companies d

          • Credit cards are a lot less common in the UK than the US. In the UK, you can do pretty much everything with debit cards, which are also controlled by Visa & Mastercard. But the UK has the advantage of effective, robust, & enforceable consumer protection laws, e.g. you can take businesses to small claims court online & they have to pay for any & all expenses incurred by the claimant, as well as compensation where applicable (the legal concept of "making good"). There was a time not so long ag

        • Not true. There are options, merchants just have to shop around.

          This year I switched my businesses credit card processor to one that bills the customer for the credit card fees.

          The receipt shows the cost of items purchased, taxes charged, and credit card fees (which vary by card used: some more, some less).

          I was concerned that customers would be unhappy, but so far it has been well received. It has saved me hundreds of dollars a month in fees.

          • Re: (Score:3)

            by q_e_t ( 5104099 )

            This year I switched my businesses credit card processor to one that bills the customer for the credit card fees.

            You're not in the UK, I presume?

      • Re: (Score:3)

        by tragedy ( 27079 )

        With so much of the world going cashless, these fees basically put the price of all consumer goods up.

        Honestly, it's ridiculous. The central banks of countries should provide payment processing. It's insane that private companies should be in a position to be able to tax what is essentially replacing cash.

        • Re: (Score:3)

          by mccalli ( 323026 )
          I made this comment, ooooh, way more than a decade ago on Slashdot and got downvoted on the "you're saying the government can see and control all your transactions?!"-basis.

          Honestly I see their point, but effectively that's already true.

          • Re: (Score:3)

            by tragedy ( 27079 )

            I think it's pretty unlikely that three-letter agencies aren't getting all the transactions at the existing payment processors anyway. There's certainly nothing in the credit card agreements saying they won't. Ideally methods of performing private transactions won't go away, but where cash is basically falling by the wayside, unaccountable companies like Visa and Mastercard should not be able to just do whatever they way. Sufficient regulation for the processors would be fine as well.

      • Re: (Score:3)

        by MS ( 18681 )

        Once upon a time (not so long ago - around 1996) - online stores charged a few percent fee when choosing to pay with credit card... until the government decided it was illegal to levy a surcharge. Who bribed our politicians to pass these laws?

        • Re: (Score:2)

          by Malc ( 1751 )

          Yes indeed, this effectively put the price up for people paying by other forms such as cash. In the EU, this came about for instance because people complained that airlines tacked additional fees on at the end of the booking process instead of incorporating everything in to the original price quote. Unintended consequences.

    • Re:Their likely reply: (Score:5, Insightful)

      by slack_justyb ( 862874 ) on Friday July 15, 2022 @02:16PM (#62706274)

      Because we can again. Our deal to limit was with the EU which you seem to no longer be a member of.

      But yeah, this was an entirely predictable cash grab from a greedy industry. When you no longer have a giant conglomeration of nations' wealth to back you up, you're easy prey for profit seeking companies. It's like the folks planning Brexit just thought everyone would be cool with them leaving and there wouldn't be anyone who would twist it around for their own gain.

      • That's not how the EU works. The EU decides on zone-wide policies & issues directives. Member countries then pass their own laws to implement the directives. Leaving the EU doesn't automagically rescind all laws that have been passed due to EU directives & many won't be rescinded because they were actually good ideas, e.g. human rights, consumer rights, labour rights, & personal privacy & anti-corruption protections.

        It's more likely that Visa & Mastercard were counting on the Tories

        • Re: (Score:2)

          by mjwx ( 966435 )

          That's not how the EU works. The EU decides on zone-wide policies & issues directives. Member countries then pass their own laws to implement the directives. Leaving the EU doesn't automagically rescind all laws that have been passed due to EU directives & many won't be rescinded because they were actually good ideas, e.g. human rights, consumer rights, labour rights, & personal privacy & anti-corruption protections.

          That's not how Brexit works. When we were in the EU, we were leveraging the power of the EU, all 300 million of them and some of the worlds largest economies for our benefit. Now we don't have that leverage and all we can do is say "stop, or we'll have to say stop again".

          MasterCard and Visa know we effectively can't punish them because they'll:
          1. Just pass the cost onto the consumer.
          2. Start a massive advertising campaign blaming the government regulation for higher prices.
          We've allowed MC and VIsa to become monopolies and took away our only means of being powerful enough to stop them. So Visa and MC can just laugh and say "and what are you going to do about it".

          It's more likely that Visa & Mastercard were counting on the Tories & their infamous "light-touch regulation" to effectively ignore it. However, the Tories are currently having to work quite hard to win back public favour, so...

          In other words, the Tories are asking for a donation to look the other way whilst normal people get screwed.

  • I'm guessing.. (Score:3)

    by mark-t ( 151149 ) <markt AT nerdflat DOT com> on Friday July 15, 2022 @02:11PM (#62706246) Journal
    "Became we want more money" isn't going to cut it?

    • Re: (Score:1)

      by Anonymous Coward

      It doesn't need to. The UK voted to exit the EU, not being bound by EU competition rules on this was part of the argument the people running the country made to trick people into Brexit as a good thing. Now it's happened all Visa and Mastercard have to respond with is "Because this was the legislation you explicitly pushed through and tricked the public into voting for".

      • As I've already put it in this thread earlier,

        "That's not how the EU works. The EU decides on zone-wide policies & issues directives. Member countries then pass their own laws to implement the directives. Leaving the EU doesn't automagically rescind all laws that have been passed due to EU directives & many won't be rescinded because they were actually good ideas, e.g. human rights, consumer rights, labour rights, & personal privacy & anti-corruption protections."

      • Its also affected the mobile phone roaming charges the Brexiters said would never return but most operators have already reintroduced them.

  • Why not use the same excuse everyone else is for increasing prices? The war in the Ukraine is severely limiting their customer base, so they must increase revenues from the remaining customer base to cover the shortfall.

  • We are merely altering the deal.

    Pray that we do not alter it any further.

    Also...you don't have any sand on you, do you? \_('.')_/

  • Is the UK big enough to run it's own credit card system? Perhaps they'll decide to do so. They might even use it to subsidize their government. Change a few laws and Visa and Mastercard would only rarely be considered.

  • For Visa stockholders.

  • There are a lot of things I spend money on that I would love to put on a credit card for the rewards points but I don't because the payee wants to charge me for using it. Note that somehow they seem to get away with charging more than what it costs them to process a credit card transaction. It wasn't always this way. The payee had to eat that fee and they couldn't pass it on to the customer. Ergo, people are using credit cards a little less than they used to so the card companies have to make up the los

  • I'm always amazed we have to pay a 3% fee to the monopoly cc companies...when in Africa you can move $ for less by text

  • They need more money to fill up their yachts and private jets.

  • Because they like money? https://www.youtube.com/watch?... [youtube.com]

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