Fees for paying by card to be banned - The Guardian


(Tom ) #1

Minimum Card Payment Charges
( related to Monzo CEO, Investor in Monzo ) #2

reduce fees for all transactions - or put prices up for all card transactions - hmmmm – let me think which will happen ??? :slight_smile:


(Toby Toller) #3

In the BBC article it says:

“Banks typically charge large retailers between 10p and 20p for each debit card transaction, or 0.6% for credit cards.”

I always thought it was the provider - Visa/MasterCard etc.

Out of curiousity, if it is the bank, why do they charge this to the retailer?


(Danny) #4

All that will happen is the cost of goods will go up.


(Ashley) #5

As someone who works in the travel industry, this is going to be a big problem for us. When on average the industry makes 10%, we are charged around 1.5% (of the gross) for credit cards and a smaller % on debit cards. That is higher than what the BBC say as travel is seen as a high risk business!!

I think you are going to see lots of retailers if they can, put up prices and/or incentivise other forms of payment. We will give you a free …, if you pay by …


(Andrew L) #6

It is not the issuing bank (e.g. Lloyds) but the bank of the merchant - known as the Merchant Acquirer (e.g Worldpay) charging to process the transaction. Visa / Mastercard set the fees that the merchant acquirers have to pay the issuers, known as interchange (although it is now capped in the EU).


( related to Monzo CEO, Investor in Monzo ) #7

presumably we will all now be getting Avios points on our debit card spending if all fees are now going to be the same whether you spend by credit or debit card :slight_smile:


(Ashley) #8

Possibly, we will see…


( related to Monzo CEO, Investor in Monzo ) #9

I won’t hold my breath :slight_smile:


(Alex Lord) #10

Do Monzo receive income somewhere along the swipe-to-debiting-your-account chain? I know monzo don’t charge, but that couple of percent charged by card networks funds gets linked to all sorts of cash back, loyalty, 3pty schemes I’ve noticed.

I assumed before monzo move to making money directly, this might have been an indirect way they were bringing in revenue to support their business?


( related to Monzo CEO, Investor in Monzo ) #11

Monzo get a transaction fee I think for card POS usage - higher in US than Europe


(Dan) #12

As far as I’m aware with the prepaid scheme they do not receive any income from the use of their cards.

This will change when they issue debit cards, but I don’t imagine it being a big earner - likely covering basic expenses such as issuing debit cards.


(Tom ) #13

From my own experience - from a retail perspective - our charges are from Worldpay. We’re not charged by our bank.

I wonder if scrapping fees being passed on to customers will have the negative response of retailers upping their minimum spend on card amounts.


#14

I think this is definitely a good move. I really don’t see why when banks/card companies make so much money anyway why they charge us for paying with cards when they promote the use of cards


( related to Monzo CEO, Investor in Monzo ) #15

from the annual report - suggesting that Monzo earns income from card transactions ?

  • "Revenue Recognition

At present the Company generates income from interchange and interest receivable. This is recognised to the extent that it is probable that the economic benefits will flow to the Company and they can be reliably measured, which is consistent with the approach to be taken with revenue in future periods."


(Dan) #16

That’s interesting. I’m sure I remember reading a post that mentioned they don’t receive any income. I stand corrected!


(Andrew L) #17

I’m not that sure on prepaid but I would expect Monzo to be earning c. 20 basis points (0.2%) of interchange on all transactions within EU and significant more if the cards are used outside of the EU.


(Danny) #18

Just Eat really annoy me with this charge but as I said prices will just go up so nothing to celebrate about really.


(Tom ) #19

I’m sure it will all pale into insignifance when Brexit fallout price rises really kick in.

Drops the mic.

Mutes topic.


(Tom) #20

It looks like debit and credit card surcharges are being abolished: