ACS calls for urgent action to improve card payments market

ACS (the Association of Convenience Stores) has responded to a Payment Systems Regulator (PSR) consultation on the interim report for its market review into the supply of card acquiring services.

The interim report made a number of proposals:
• Requiring retailer contracts with acquirers to have an end date to prompt comparisons within the market
• Changing POS terminal hardware contracts to have a limited length, not auto-renew and be able to exit without excessive fees
• Making it easier for retailers to research and compare prices via price comparison platforms

In its submission, ACS supports these interventions, while going further to recommend the overall merchant service charge seen by retailers includes all fees associated with accepting card payments, due to a proliferation of new fees making it harder to compare and switch.

The submission also calls on the PSR to investigate the potential circumvention of the interchange fee regulation, which capped interchange fees paid to banks, via rapid increases in scheme fees paid to card schemes such as Visa and Mastercard.

ACS chief executive James Lowman said, “Convenience retailers have invested in their stores to provide their customers with the freedom to use a range of different payment methods.

“However, the cost of accepting these payment methods has continued to increase, making it more difficult for retailers to provide a range of payment options to their communities. The Government needs to introduce practical measures to make it realistic for retailers to compare and switch acquirers. This would ensure the market works for retailers, and ultimately consumers.”

Findings from the 2020 ACS Local Shop Report show that around half of convenience stores (49%) offer free to use cash machines, 88% offer contactless payments and 80% offer mobile payments, as retailers continue to invest in digital payment options to meet changing consumer preferences.