In this first of a two series blog, we will be outlining the changes taking place, followed by our views on what this means for sellers of merchant services and why we feel this is good news for the industry.
As a result of their findings, the regulator has mandated changes to 14 of the most significant providers of card acquiring services, starting in January 2023 with the length of terminal contracts, and then in July 2023 with the adoption of easier to understand pricing information and tools. The idea being that by shopping around or negotiating, businesses can potentially save thousands £GBP per year in fees. For the small number of non-mandated acquirers, it is expected they will be included in the future.
One of the key elements here is that re-sellers of card processing solutions for the 14 firms also must adopt the same mandate around card terminal contracts.
Summary of the new directions mandated for the 14 firms.
January 2023 – Allow businesses to switch card acquiring providers easily by requiring that Point of Sale (POS) terminal contracts do not run for more than 18 months.
July 2023 – Provide trigger messages to businesses reminding them at the end of their contract term that they could get a better deal if they shopped around.
July 2023 – Provide summary information boxes of the card fees businesses are charged and provide an initial online quotation tool of key charges to help them make informed choices.
Kate Fitzgerald, Interim Head of Policy at the PSR, said “Card-acquiring services play a crucial role in the payments sector, from the businesses that use them to accept payments, to the consumers using them to pay, so it’s important they work well for everyone.”
She continued “We believe that businesses could be saving up to thousands of pounds a year if it was simpler for them to compare prices and switch providers. The steps we’re taking today will make it easier for the 1.5 million small and medium sized businesses in the UK to do this, benefiting both them and their customers.”