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The Treasury Committee has written to Visa and Mastercard requesting a justification for recent increases in UK card transaction fees.
“Recent rises in the fees paid by firms for cross-border debit and credit card transactions add additional costs to businesses, many of whom are already grappling with rising inflation and other cost pressures,” said Mel Stride, the chair of the Treasury Select Committee.
“That’s why we have today written to Visa and Mastercard to request an explanation for these fee increases.”
The cross-party group of parliamentarians has written to Charlotte Hogg, Visa’s Europe chief, and Kelly Devine, who represents Mastercard’s UK and Ireland group.
The intervention comes after Visa and Mastercard increased cross-border interchange fees on purchases made by UK consumers to European businesses.
Fees increased from 0.2 percent to 1.15 percent for debit cards and 0.3 percent to 1.5 percent for credit card transactions.
Although EU regulations that capped these fees no longer apply, the Payment Systems Regulator (PSR) has told the committee it has not seen “evidence that shows that there have been significant changes in the costs” for card issuers.
It comes as the PSR informs the committee in a newly published letter that it is concerned these fee rises demonstrate the market is “not working well” and “could result in higher prices paid by UK merchants and consumers”.
“Although the scheme operators have already provided some explanation for the increases, we wish to explore the reasons for them further,” Chris Hemsley, the PSR’s managing director, said.
Stride’s letters set a deadline of July 27 for a response from both Hogg and Devine.
New crypto-assets Inquiry
As well as scrutinising the work of the PSR, the Treasury Select Committee has launched a new inquiry investigating the crypto-assets sector.
In the inquiry, the committee will explore the role of crypto-assets in the UK and the opportunities and risks they bring to consumers and businesses.
The bipartisan group requests written evidence submissions that examine whether cryptocurrencies are likely to replace traditional currencies, what opportunities and risks the use of crypto-assets pose for individuals and the economy, and their impact on social inclusion.
MPs are also expected to explore how regulation could be balanced to provide protection for consumers without stifling innovation.
“Crypto-assets have the potential to bring new and innovative changes to the UK financial system, the economy and broader society,” said Stride. “However, there are also significant concerns around their use to launder funds, purchase illegal products and evade international sanctions.”
According to the committee, views on whether the government and regulators are suitably equipped are welcomed, as are submissions discussing the effectiveness of recent regulations around advertising and money laundering in protecting consumers.
The committee will seek to investigate whether regulation could benefit crypto-asset start-ups by improving consumer trust and resilience and the potential impact of distributed ledger technology on financial institutions, including the Bank of England.
“In recent months, the value of most crypto-assets has fallen dramatically,” acknowledged Stride. “As a committee, we will be investigating the opportunities and risks that crypto presents, where additional regulation may be required, and the lessons the government can learn from other countries.”
