(Bloomberg) -- New rules after Brexit have increased credit and debit card costs by 150 million pounds ($200 million) a year, with both U.K. and European retailers losing out.
Britain's departure from the European Union removed caps on transactions between the U.K. and the European Economic Area. That's allowed card firms to increase cross-border payment fees, and some have more than quintupled, according to research by retail payments advisory firm CMS Payments Intelligence and the British Retail Consortium.
British retailers face extra costs of 36.5 million pounds to accept payments from the EEA. Their counterparts in Italy, Germany and the Netherlands have to shoulder an additional 53 million pounds between them. That could translate into higher price tags for their customers, adding to inflationary pressure. U.K. retailers already pay 1 billion pounds in fees to accept card payments, according to the BRC.
“At a time when retailers are facing rising costs across the board, from higher energy prices to soaring shipping charges, it is likely that some of these five-fold fee increases will eventually be passed on to hard pressed consumers,” said Andrew Cregan, payments policy adviser at the British Retail Consortium.
Regulators are also scrutinizing card firms' decisions to increase their fees. “Such pricing behavior poses real questions about how well this market is working,” Chris Hemsley, the managing director of the Payment Systems Regulator, said in a speech last month.
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