Axe the Card Tax Project Proposes A Reform Of Card Payment Costs

The Axe the Card Tax campaign has asked the UK Treasury and Payments System Regulator to look at the cost of card payments to encourage fintech payment innovation.

The campaign says that every card payment can cost a store an average of 0.7%, and they think that British businesses pay a $5 billion card tax every year.

Axe the Card Tax is made up of 240,000 businesses and trade groups like the Coalition for a Digital Economy (Coadec), the Federation of Small Businesses, the British Retail Consortium, the Association of Convenience Stores, the Federation of Independent Retailers, and the Charity Retail Association.

People are being asked to:

All transaction fees should be frozen by the Payment Systems Regulator (PSR) until the PSR’s investigations of the payment sector are done.
The PSR will reverse the 400% increase in cross-border interchange fees that was put in place by major card schemes in early 2022 after Brexit.
The UK Treasury will start looking into how much it costs to take card payments in the UK.

So that stores that want to offer alternatives to card payments can do so with certainty and clarity, there needs to be regulation of alternative providers and clarity on the future of open banking.

Charlie Mercer, head of economic policy at Coadec, says: “With the rise of digital tech over the last decade, you’d expect to see a variety of ways to pay emerging, but in reality only card payments have benefited. Cards have their place, but they’re not the only way to pay. High card payments fees incentivise banks to maintain the status quo, and the adoption of payment innovations like open banking will always face an uphill challenge whilst this remains the case.”