£1bn assault on the High Street: Shopkeepers suffer as Visa hikes fees on card payments. Unfortunately, this will give the green light to increase transaction charges for Taxi drivers taking Card payments.
It's estimated that shopkeepers will pay £1billion extra a year to payments giant Visa after it hiked fees.
The increase comes as the Taxi trade faced a boom in customers who want to pay by card.
But what many passengers don’t realise is that every transaction costs the driver, and Visa has been accused of cashing in, by hiking its fees.
Card sharks: Taxi have seen a massive increase in customers who pay by card for even the cheapest journeys meaning that drivers with company's that charge the extra 20p on top of the transaction percentage, pay even more in fees
Experts warned that some will see their bills more than double.
Obviously it's not just Taxis who will be affected, payments consultant CMSPI said that increased card costs will hit Europe’s shops for £2billion.
In the UK alone, which has embraced contactless cards and chip and pin, the bill will be £1billion.
Visa Europe has doubled charges since 2015 from an average 4p per transaction to 8p, says CMSPI.
Firm’s crippling £26,750 card bill
Hardware store owner Vin Vara says his firm is struggling because of huge bills from credit card companies.
Vara, 58, employs 38 people at 11 Tool Shop stores in London and lost £20,400 in fees last year as shoppers paid by credit card.
Some 60 per cent of customers pay by card and he expects the bill to rise to £26,750 this year.
He said: ‘People don’t understand the damage this can do. I’m scared for others on the High St about what’s going to happen to them.’
It used to keep just 1.5p of this as profit but now takes 5p after cutting costs, the consultant said.
CMSPI chief executive Brendan Doyle said: ‘This is incredibly disappointing. Visa, a multinational that consistently reports profit margins in excess of 50 per cent on multi-billion-dollar revenues, is piling cost after cost onto retailers and the latest change will be particularly hard on struggling small businesses.’
He added that CMSPI will complain to the European Commission about the hike.
Visa has become more aggressive since it was bought by its US sister firm for £15billion in 2016.
Until then, Visa Europe had been owned by banks, including Lloyds and Royal Bank of Scotland, and they made billions from its sale to namesake Visa Inc.
The American company’s chief executive Charles Scharf plotted to hugely increase fees – in 2015, he said he hoped to ‘expand yields in Europe’.
MPs and business groups called for regulators to step in.
SNP MP Stewart Hosie, of the Treasury Select Committee, said: ‘It’s a scandal card issuers’ fees have increased massively. I would hope and expect card issuers would think again before they impose these costs.’
Meanwhile, High Street retailers face average hikes for UK card fees of 75 per cent, and other European card costs will come close to trebling with an increase of 189 per cent.
James Lowman of the Association of Convenience Stores said: ‘We encourage the Payment Systems Regulator to look closely at these fees to ensure fairness.’
Andrew Cregan, at the British Retail Consortium, also backed intervention by the regulator.
Visa said: ‘The figures quoted are misleading and over-inflated. Our pricing means we can invest in world-leading cybersecurity and consumer protection, in innovation such as contactless and mobile payments, and in providing a global network which enables billions to make purchases safely, securely and reliably.’
TAXI LEAKS EXTRA BIT :
In the past, we've seen many retailers refuse to take Amex because of the time it takes them to pay up.
We could now see the same exclusion notices regarding payment with Visa cards.
The London Taxi trade haven't been granted the right to choose how they are paid as our largest org says "it was a done deal'....and it was the drivers who were done!
The trade were promised a increase in bums on seats and a massive publicity campaign from TfL.....it just never happen.
Let's not forget which org came out of a meeting with TfL and said it was a done deal !
They've allowed TfL to mandate us into a position where we are losing our hard earned pounds hand over fist.