Fallout continues from post-Brexit changes to the UK's caps on 'interchange' fees which are paid by retailers' card providers to consumers' payment card issuers under card scheme rules. Therefore, EEA-based retailers are trying to move as many transactions out of the UK and into the EEA as possible and, as Amazon has just announced, could also cease accepting any UK customers' payment cards that attract the higher fees. Difficult to say who'll win, but it seems unlikely to be the British consumer... If you're an affected retailer, please get in touch.

What changed?

Broadly, the caps under the UK regulation now only apply where all the participants are based in the UK. This means that card schemes are able to raise the interchange rates for retailers who sell to UK cardholders from outside the UK, including retailers based in the EEA (where fee caps still apply to their EEA card receipts). 

Why are EEA-based retailers bothered?

For regulatory reasons, Brexit has already meant that EEA-based retailers who were customers of UK payment providers had to switch their commercial relationships to EEA-based payment providers. Generally, that just meant moving the contracts to a new EEA company that the UK payment providers got authorised for the purpose of separating their UK and EEA businesses.  

But under card scheme rules, this still meant that their payments from UK cardholders were vulnerable to higher interchange fees. 

What are EEA retailers doing about it?

EEA-based retailers are now trying to move as many card transactions out of the UK and into the EEA as they can. The alternatives are to either set up local UK retail entities (too costly), or simply stop accepting payments via cards that attract higher interchange fees, as Amazon has just announced

It's difficult to say who will win, but it seems unlikely to be the British consumer...

If you're an affected retailer, please get in touch.