--Consumer group calls for probe on high card fees

Internet Business News
03-30-2011
--Consumer group calls for probe on high card fees

INTERNET BUSINESS NEWS-(C)1995-2011 M2 COMMUNICATIONS

30 March 2011 -- Consumer protection group Which* has called on the Office of Fair Trading (OFT) to launch an investigation into excessive fees that merchants charge their customers when paying with debit or credit cards, the Financial Times reported.
The potential OFT probe is likely to cover a number of businesses ranging from low-cost airlines to estate agents and from taxi companies to insurance groups. Shopping online has boosted debit cards payments in the UK above the volume of in-cash transactions.

Although credit card surcharges are commonly imposed by certain retailers, others, including estate agent Foxtons, Internet provider AOL (NYSE:AOL) and budget carrier Ryanair (ISE:RYA), introduced similar charges for debit card payments too.

Retailers claim they are passing the fees charged by banks onto consumers, but the bank charges appear to be considerably lower than what retailers are seeking from their customers.

Which* claims the cost of payment processing is up to GBP0.20 for a debit card and up to 2% of the transaction for credit card payment.

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(Copyright M2 Communications, 2011)