Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what estimate he has made of the number of (a) airline and (b) other companies that charge over the 0.3 per cent cap for credit card transactions.

The Payment Systems Regulator is responsible for monitoring compliance with the Interchange Fee Regulation in the UK and for taking enforcement action where appropriate. Government has therefore not made an analysis of the number of companies that do not comply with the Regulation.

The Interchange Fee Regulation (IFR) caps the fees that a merchant acquirer can be charged by a card issuing bank at 0.2% and 0.3% for debit and credit cards respectively. This cost can be passed on to consumers through the practice of surcharging. The Government recently closed a consultation on how the revised Payment Services Directive should be implemented in the UK. One of the provisions in the Directive is a ban on merchants surcharging cards regulated under the IFR.

The interchange fee is part of the merchant service charge that a merchant pays to its bank or merchant acquirer to process its card transactions