Retailers face higher interchange fees as HSBC Merchant Services has added a charge for premium credit cards.
In a letter to a UK retailer, seen by Retail Week, HSBC Merchant Services said: “With effect from June 1, 2010, we are introducing a charge for premium credit cards that will be applied when you accept a premium credit card and is in addition to your standard credit card charge.”
Retailers will have to foot an extra 0.7% interchange fee for accepting face-to-face and internet transactions and 0.9% for transactions taken through mail or phone orders.
The interchange fee is the amount from a customer transaction that must be passed on to the card issuing bank, so the change means retailers will have to pay higher fees for accepting premium credit cards.
An HSBC Merchant Services spokesman said: “These increases reflect the higher costs associated with processing premium, business and corporate cards. The changes reflect the fact that there are more of these card types in circulation now than ever before. As such, the rising costs cannot be absorbed by the processors, like us, themselves.”
The BRC said it will advise small retailers to urge their customers not to use these cards. BRC Brussels director Alisdair Gray said: “You get no extra services, no extra benefits, but you pay a lot more interchange.”