Office of Fair Trading extends interchange charge investigation to debit cards

It was announced today that the Office of Fair Trading is now extending its investigation into interchange fees relating to Mastercard and Visa credit cards to include debit cards as well.

The investigation relates to the interchange fees that retailers are charged by banks for the privilege of being able to take payment via transactions on plastic cards. The Office of Fair Trading has already concluded that the charges imposed by card issuers in this respect are far too high.

Officials from the Office of Fair Trading released a statement, saying: 'The expansion of this investigation is consistent with the scope of the European Commission's current investigation into MasterCard's European intra-regional interchange fees. In concluding the new investigation, the OFT will seek information from card issuers and other parties as it considers appropriate.'

The Director General of the British Retail Consortium, Kevin Hawkins, also added his comments, stating: 'Retailers have no choice but to accept cards belonging to MasterCard and Visa and to pay their fees for the privilege. The fees are excessive and non-negotiable.

They amount to a sales tax on every transaction and total tens of millions of pounds a year for some retailers. MasterCard and Visa have been sharply pushing up debit card fees with no convincing justification. We are concerned they can see the writing on the wall for their huge credit card fees and are looking to make up potential losses.'

He also added: 'With an ever-increasing proportion of retail sales now made on debit cards it has to be right to include them. It is vital we have a comprehensive inquiry covering all types of cards even if that further lengthens the process.' The BRC has been lobbying with regards to this issue for some time, and said that the investigation was welcome but overdue.

Tom Smith
26th February 2007

• Mastercard
• Visa