The UK Payment Systems Regulator (PSR) has fined banking heavyweight Barclays £8.4 million for failing to comply with the Interchange Fee Regulation (IFR).
The reason, PSR says, is because Barclays “did not provide retailers with full information about the costs of card services it supplied”.
As a result of Barclays’ actions, it says “retailers were unable to easily understand the transaction fees associated with accepting certain types of card payments”.
The PSR explains: “When paying by card, retailers have to pay fees to accept the payment, and these fees can be passed on to consumers through higher prices.
“Barclays’ failure meant retailers weren’t fully aware of the fees they were paying so could not 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.”
The PSR, which is the UK’s main authority for enforcing the IFR, identified that Barclays failed to comply with the regulation for over three years in total, from December 2015 to December 2018.
During this time, Barclays processed a third of all card payment transactions in the UK, meaning thousands of retailers and transactions were affected.
In addition to the £8.4 million fine, the regulator says it has made sure that the full information required under the IFR is now available to all retailers who use Barclays’ card payment processing services.
The investigation was opened on 15 November 2018. Barclays agreed to settle at the earliest possible stage and therefore qualified for a 30% early settlement discount.
Were it not for this discount, the fine would have been £12 million.
“Where we see banks failing to comply with the IFR, we have powers to intervene to make sure these important rules are followed, so retailers can make informed decisions about the services they use,” says Chris Hemsley, managing director at the PSR.
Earlier this year, it fined another high street bank, NatWest, £1.82 million for overcharging interchange fees on credit cards. – FF