You are here: Home - Credit Cards & Loans - News -

Why buying from the EU is about to become more expensive for Visa users

0
Written by:
17/03/2021
Payments firm Visa is set to hike the interchange fees it levies when shoppers in the UK order items from Europe.

According to Sky News, Visa is set to inform around 4,000 clients of the fee increase this week.

It follows a similar increase from payments rival MasterCard earlier this year.

The reports suggest that the fees will increase to around 1.5% for online credit card payments ‒ making them five times higher than the current fees ‒ while for debit cards, interchange fees will jump from 0.2% to 1.15%.

What are interchange fees?

As shoppers, we don’t pay interchange fees directly. Instead they are levied on retailers by their bank when the retailer processes a payment. So for example, when you buy some clothes from an online store, that store will have to pay an interchange fee based on how they go about paying for that purchase.

As a result, while the increase to interchange fees will not immediately impact shoppers, there is a danger that the increased fees will push retailers to increase their prices, particularly for customers based in the UK.

Back in 2015 the interchange fees which banks can charge were capped by the EU. These caps stood at 0.2% of the transaction for debit card payments, and 0.3% for credit card deals.

However, now that the UK has left the EU these safeguards are no longer in place.

Yet another blow

Adam French, consumer rights expert at Which?, described the move as “disappointing”, noting that since the end of the transition period British shoppers have had to come to terms with “a confusing array of new fees and rules and if the increase to interchange fees is passed on to consumers via the price of goods, it will be yet another blow”.

He continued: “The government must be transparent about how new rules and regulations will impact the money in your pocket and work to address gaps in cross-border consumer protections that emerge – in this case, the protection we could lose from the cap on interchange fees that was in place.”

Visa declined to comment on the reports.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Privacy Preference Center

Necessary

Advertising

Analytics

Other

Read previous post:
150,000 renters ‘at risk of eviction’ due to Covid debt

StepChange says renters are in urgent need of help to avert a crisis of widespread housing insecurity, homelessness, and long-term...

Close