Magazine article Marketing

Retailers Turn Tables on Banks

Magazine article Marketing

Retailers Turn Tables on Banks

Article excerpt

Never mind the technicalities, a momentous struggle for power is now underway between the UK's banks and its retailers.

The immediate cause at issue is the rather arcane subject of charges for debit card transactions. As exclusively revealed in Marketing last week, the retailers have persuaded the OFT to investigate allegations that the banks' over-cosy relationship is leading to excessive fees.

Under the current system, each retailer asks a bank, the "merchant acquirer", to process all the payments it gets from its customers (of whatever bank). The retailer pays the merchant acquirer a fee for this service, part of which goes toward an "interchange fee", which is passed between the merchant acquirer and other banks as they sort out payments between them.

In the mad rush for the merchant acquiring business two years ago, merchant acquiring fees fell rapidly. But now the banks are saying that the charge for each debit card transaction may rise by as much as 5p a throw.

This has sent the retailers into a frenzy. The whole ideal of debit cards was that they would be cheaper and quicker than cheques. But if the banks get their way, debit payments could cost them more. And, they point out that interchange fee doesn't seem to have been affected by cut-throat competition. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.