The UK’s Payment Systems Regulator (PSR) has fined Barclays for not being clear about the fees it charges retailers on card transactions.
The PSR says the bank did not provide retailers with transaction information required under the Interchange Fee Regulation (IFR.) This meant retailers were unable to easily understand the transaction fees associated with accepting certain types of card payments.
When a customer pays for something by card, the retailer has to pay fees to accept the payment, and these fees may be passed on to the consumer through higher prices. Barclays’ failure meant retailers weren’t fully aware of the fees they were paying so could not effectively compare prices of card services, shop around to find cheaper deals, or negotiate the best deal with Barclays – which could have ultimately saved them and their customers money.
The PSR’s investigation identified that Barclays failed to comply with the IFR for over three years in total, from December 2015 to December 2018. During this time, Barclays processed a third of all card payment transactions in the UK.
Barclays has been fined £8.4m for the failures.
“It’s vital that retailers and consumers get value for money on payment services – the interchange fee rules are an important part of making sure this happens,” said Chris Hemsley, the PSR’s Managing Director. “Barclays’ failure to be transparent with retailers about the fees they pay for card services meant retailers could have been missing out on better deals”.
“Where we see banks failing to comply with the Interchange Fee Regulation, we have powers to intervene to make sure these important rules are followed, so retailers can make informed decisions about the services they use.”
Earlier this year, the PSR fined NatWest £1.82m for overcharging interchange fees on credit cards.