In the UK debit and credit cards are an integral part of our daily lives – a success story in the evolution of how we pay for the things we buy at home and abroad. They have also been an essential ingredient in the development of online shopping. The future structure of card payments, and whether consumers will be required to pay more, is now uncertain.
The European Commission’s model brings a risk that banks and other card issuers will be forced to implement new fees, because the reduced income from retailers will mean that the substantial costs of providing cards, and the systems which enable customers to pay for things safely and speedily, will have to be funded by cardholders in other ways.
The UK is not typical of the wider EU because we have a much more extensive use of cards. Some 47 million UK consumers hold a debit or credit card, accounting for over 30% of all EU card spending, and over 70% of EU credit cards are held by British consumers. Card payments are vital to the British economy. Very many businesses, beyond traditional retailing, also depend on cards for consumers to make payments to them. This is less true in many other EU member states.
All the evidence from other countries where similar laws have been introduced is that while retailers have benefitted, this has not resulted in lower prices for consumers. The main immediate beneficiaries of these proposals will be the largest 100 EU retailers, with customers losing out.