Charge will be fixed rate

The British Retail Consortium (BRC) has claimed victory in its battle to get MasterCard’s plans for a new approach to debit card charging withdrawn.

MasterCard has annonced it will not be implementing a different way of charging to go with the launch of its new Debit MasterCard.

The BRC said sustained pressure from itself and its members led to the withdrawal, which it says is good news for retailers and consumers. At present, retailers pay a fixed fee on debit card transactions regardless of the value of the transaction. Rates range from 6 pence to 18 pence, depending on the card, where it is used and the method of the transaction, but the fee remains the same regardless of whether it is a£20 or£200 transaction.

MasterCard had wanted to charge a fixed fee of 3.5 pence, plus 0.15 per cent of the purchase price, which would have led to higher charges on any sale of more than£20. Retailers had feared that this new system would lead to sharply increased costs that would need to be recouped from customers.

BRC director-general Kevin Hawkins said: “The withdrawal of MasterCard’s planned charging scheme is a victory for retailers and consumers. Higher costs would put the squeeze on retailers and ultimately filter through to customers.”

MasterCard has yet to announce how it will charge retailers for transactions made with its new Debit MasterCard, but it will not be linked to the value of the transaction.