Barclays Is Fined £8.4 Million For Its Interchange Fee

The Payment Systems Regulator has fined Barclays Bank £10 million for failing to provide shops with complete information about the costs associated with various card services.

The watchdog determined that Barclays, the most prominent card acquirer in the United Kingdom, did not furnish shops with the transaction data needed under the Interchange Fee Regulation (IFR).

As a result of Barclays’ lack of openness, merchants could not compare rates of card services, shop elsewhere for lower offers, or negotiate the best deal with the bank.

Chris Hemsley, managing director of the PSR, states:

“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. 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”.

From December 2015 to December 2018, the PSR’s inquiry determined that Barclays failed to comply with the IFR for over three years. During this period, Barclays handled one-third of all card payment transactions in the United Kingdom.

The PSR penalised NatWest Group banks £1.82 million earlier this year for overcharging interchange fees on credit cards.

According to Hemsley:

“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.”