“The NFDA has written to HM Treasury and the Department for Business, Energy and Industrial Strategy to highlight the serious impact that the debit card charges introduced by the Interchange Fee Regulation are having on our members”, said Sue Robinson, Director of the National Franchised Dealers Association (NFDA) which represents franchised car and commercial vehicle retailers in the UK.

The EU Interchange Fee Regulation (IFR), which took effect throughout 2015 and 2016, imposed a new structure for fees charged by card processing companies. Debit cards fixed per transaction fees were replaced by percentage fees similar to credit cards’ ones. At the same time, the 50p cap on debit card payments was removed.

The new fees were intended to be fairer to consumers by lowering costs on smaller debit card transactions. However, under the current system, businesses that trade in high value goods such as cars, are facing significant extra costs which are difficult to absorb. It is likely that these additional charges will be passed on to the customer in higher prices.

The European Commission has planned to assess the impact of IFR in 2019.

Robinson continued, “With the focus placed on value, rather than volume of transactions, the new system is adversely affecting some industries more than others. Automotive retailers are being disproportionately penalised with an extra £18.2 million* now being paid in interchange fees.

“In addition, car retailers have previously moved away from taking cash payments to debit cards in order to prevent money laundering and the new charges are having a negative impact on the positive steps previously taken.

“In a period of uncertainty, it is essential that UK’s economic policies and regulations encourage investment and spending for both businesses and consumers. The IFR is a damaging policy that should be reconsidered following the UK’s exit from the European Union, if amendments cannot be made.

“NFDA urges the Government to support us and call on the Commission to bring forward the impact assessment date to 2018.”


NOTES TO EDITORS: *Figures are based on data from the UK Cards Association – Card Expenditure Statistics 2017 (Debit Cards)

Gabriele Severini, NFDA Communications Officer
Tel: 020 7307 3423
Mob: 07880 039897
Press Office direct line: 020 7307 3422
Press Office fax: 020 7307 3406

Web: www.rmif.co.uk Email: gabriele.severini@rmif.co.uk

The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.