Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what she is doing to reduce the cost of accepting payments for small businesses.

The Government recognises the importance of ensuring that the cost of accepting payments, including cards, is fair to all parties, and that our payment systems work for all.

The Payment Systems Regulator (PSR), the UK’s economic regulator for payments, has recently concluded two market reviews into card fees to assess if increases in prices are fair and reflect a market that is operating well. The PSR is now considering its next steps, including remedies designed to increase the transparency of scheme and processing fees.

https://www.psr.org.uk/our-work/market-reviews/

There are a number of fees that can be placed on merchants, including interchange fees which are governed by the Interchange Fee Regulations 2015 (IFR). The IFR caps the fees that are paid by a merchant (or trader) to the card user’s bank. The caps are currently set at 0.2% for every transaction using a debit card, and 0.3% for credit card transactions.

The Government is also committed to ensuring that payment options remain affordable and accessible for small businesses, including through measures that promote competition and reduce unnecessary costs. The National Payments Vision, published in November 2024, sets out the Government’s ambitions for a trusted, world-leading payments ecosystem delivered on next generation technology, where consumers and businesses have a choice of payment methods to meet their needs.

This included the ambition for seamless account-to-account payments to be developed as a ubiquitous payment method – enabling consumers to pay digitally for goods and services in shops and online, without using a card. This would provide greater choice to consumers and merchants in how they make and receive payments, which in turn is likely to spur innovation and downward competitive pressure on the cost of payments.