Changes to Multi-lateral Interchange Fees
Discussion
Hi all,
I've posted a copy of a letter I received today, and am struggling to understand (or believe) what it is saying:
(I don't know why it's posted sideways as that's not how it appears on pc).
The letter appears to be telling me that interchange fees were capped (I understand by the eu).
It says From 1 September 2016 a flat fee will apply to all UK domestic debit card transactions ... and all... caps will be removed.
It lists six changes, and number 5 is "Commercial charge per transaction 1.85%".
This is something of a bomb shell tucked away at number 5, and If I am understanding correctly, based on my last 3 months trading my debit card processing fees will increase by 1,100%, and I can't believe I've got this right.
I have had 3 conversations with the bank and nobody can really explain anything to me at all and I've been promised a call back.
So, am I understanding correctly or have I gone mad? Anyone else had anything similar? Appreciate any help.
I've posted a copy of a letter I received today, and am struggling to understand (or believe) what it is saying:
(I don't know why it's posted sideways as that's not how it appears on pc).
The letter appears to be telling me that interchange fees were capped (I understand by the eu).
It says From 1 September 2016 a flat fee will apply to all UK domestic debit card transactions ... and all... caps will be removed.
It lists six changes, and number 5 is "Commercial charge per transaction 1.85%".
This is something of a bomb shell tucked away at number 5, and If I am understanding correctly, based on my last 3 months trading my debit card processing fees will increase by 1,100%, and I can't believe I've got this right.
I have had 3 conversations with the bank and nobody can really explain anything to me at all and I've been promised a call back.
So, am I understanding correctly or have I gone mad? Anyone else had anything similar? Appreciate any help.
At a guess, won't number 5 only apply to B2B transactions? So if Joe Blogs Ltd has you service his van and he pays by card that is what you'll be charged.
Number 1 will apply to Mrs Miggins and her Nissan Micra?
Oops, didn't read the other options, perhaps it only applies if Joe Blogs Ltd has an account?
Number 1 will apply to Mrs Miggins and her Nissan Micra?
Oops, didn't read the other options, perhaps it only applies if Joe Blogs Ltd has an account?
Edited by 951TSE on Thursday 11th August 17:38
951TSE said:
At a guess, won't number 5 only apply to B2B transactions? So if Joe Blogs Ltd has you service his van and he pays by card that is what you'll be charged.
Number 1 will apply to Mrs Miggins and her Nissan Micra?
Oops, didn't read the other options, perhaps it only applies if Joe Blogs Ltd has an account?
Nevertheless you might be on to something, it lists consumer cards, then business debit, Premium credit but not business credit as such, maybe that's what they mean by 'Commercial', but I do think it's as clear as mud.Number 1 will apply to Mrs Miggins and her Nissan Micra?
Oops, didn't read the other options, perhaps it only applies if Joe Blogs Ltd has an account?
Edited by 951TSE on Thursday 11th August 17:38
It is definitely referring to commercial debit cards.
We had the same change with First Data. We used to have a lot of regular B2B customers settle their accounts by debit card because it was just easy and we were charged a flat rate - approx 12p I think. We have now stopped taking them and they have to pay by faster payment.
We had the same change with First Data. We used to have a lot of regular B2B customers settle their accounts by debit card because it was just easy and we were charged a flat rate - approx 12p I think. We have now stopped taking them and they have to pay by faster payment.
I was told by my credit card supplier that they were all moving to a percentage based system, even debit cards, just over 1% and more for premium cards.
A year ago, we were paying 13p per debit card, and 1.1% on credit cards but our mean charge (Revenue/cost) worked out to 0.075%.
This was mostly retail (so private debit cards)
A year ago, we were paying 13p per debit card, and 1.1% on credit cards but our mean charge (Revenue/cost) worked out to 0.075%.
This was mostly retail (so private debit cards)
mlatham said:
OP, I work in the payments industry. If you want to pm me your number I'm happy to talk you through all this. People in my industry do like to try and baffle their customers!
That's very kind of you, I'll perhaps do that on Monday if that's ok. The only bit that concerns me is point 5, I now think it must be for business credit cards, but I also think there must be a reason for it being so unclear. I just don't fancy waiting until my statement comes through in October to find out for sure.
You're right. Point 5 refers to any commercial or business credit cards. Interestingly, the interchange fee (cost to your processor) for business/commercial cards has not changed as part of the interchange fee regulation this letter refers to so you need to check what you were paying before..might be the same or they might have taken the opportunity to re-price you.
The wholesale cost of business / commercial credit cards is higher than consumer cards, hence the difference in the price you pay. 1.85% is not outrageous for these cards but there could be savings to be had and from your perspective, it might be that accepting these cards is more expensive than asking your business customers to pay using other methods.
Am around on Monday if you want to talk through anything.
The wholesale cost of business / commercial credit cards is higher than consumer cards, hence the difference in the price you pay. 1.85% is not outrageous for these cards but there could be savings to be had and from your perspective, it might be that accepting these cards is more expensive than asking your business customers to pay using other methods.
Am around on Monday if you want to talk through anything.
Gassing Station | Business | Top of Page | What's New | My Stuff