Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of requiring card payment providers to proactively offer small business customers the lowest rates for which they are eligible.

The Government recognises the importance of customers of financial services firms, including payment firms, receiving good outcomes.

A market review by the Payment Systems Regulator (PSR) found that the supply of card-acquiring services, which allow businesses to accept card payments, did not work well for small and medium-sized merchants and large merchants with annual card turnover up to £50 million.

In response, the PSR introduced new rules to improve outcomes for small businesses. These include personalised summary boxes containing key price and non-price information; online quotation tools; and messages prompting businesses to shop around or switch. It also introduced an 18-month maximum duration for point-of-sale terminal lease and rental contracts, followed by rolling monthly contracts. These measures are intended to help businesses compare offers and reduce barriers to switching.

Furthermore, the PSR has also recently introduced a set of requirements on the information that Mastercard and Visa must supply to card acquirers when setting certain fee levels that may be passed down to small businesses. This should help reduce unnecessary operational costs, support more accurate billing and pricing to small businesses, and help card acquirers and small businesses make better-informed choices about optional services and behavioural fees.

The Financial Conduct Authority’s Consumer Duty also requires firms to act to deliver good outcomes for retail customers. The FCA has confirmed that the Duty applies to card acquirers serving micro-enterprises and charities with annual income below £1 million. The FCA expects firms to give customers the information they need, at the right time and in a way they can understand.