Barclays Slapped With £8.4m Fine Over Card Fee Disclosures

December 2, 2022
The Payment Systems Regulator (PSR) has fined Barclays for not giving retailers full information about the costs of its card services.

The Payment Systems Regulator (PSR) has fined Barclays for not giving retailers full information about the costs of its card services.

According to the PSR, Barclays breached the Interchange Fee Regulation (IFR), which requires the acquirer to provide certain information to the retailer for each card-based payment transaction.

However, for three years between 2015 and 2018, Barclays did not provide that information to its merchant customers because its legacy platforms were unable to supply it.

The bank knew that it did not have the capability to provide the required information to merchant customers until its programme update was completed or that it would have been unfeasible “due to costs and timescales implications”.

As a result, although it intended to comply with the IFR by making information available to merchants who requested it, the decision notice says, retailers were unable to easily understand the transaction fees associated with accepting certain types of card payments.

As retailers were not fully aware of the fees they were paying, they could not make an informed decision about passing fees on to consumers through higher prices, the PSR said.

Retailers were also unable to effectively compare prices of card services, shop around to find cheaper deals, or negotiate the best deal with Barclays, which could have ultimately saved them and their customers money, according to the regulator.

The PSR notes that Barclays processed a third of all card payment transactions in the UK during the time of the infringement period, which means that thousands of retailers and transactions could be affected by the conduct.

“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,” Chris Hemsley, the PSR’s managing director, said.

“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”, he added.

Barclays agreed to settle the case at the earliest possible stage and qualified for a 30 percent early settlement discount.

The bank will now have to pay a fine of £8.4m to the regulator.

This is the second time the PSR, the regulator charged with overseeing the IFR in the UK, has brought an enforcement action related to interchange fees.

Earlier this year, the PSR imposed a £1.82m fine on NatWest after four of its banks overcharged interchange fees on credit cards.

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