“The National Franchised Dealers Association (NFDA) and National Association of Motor Auctions (NAMA) have written to the Payments Systems Regulator, calling for a dispensation for the automotive industry for debit card charges”, said Sue Robinson, Director of NFDA and NAMA, commenting on the new cap on card fees introduced in September.
A cap on credit and debit card fees was introduced on 1 September 2016. This was intended to be fairer to consumers by lowering fees on smaller debit card transactions, but has led to unintended consequences for car retailers and auctions. The credit card cap has not offset the increase in debit card charges that the new fees bring, meaning businesses are paying considerably more to process card payments.
Sue Robinson continued, “Fees have increased from between 40 to 60 pence per transaction, to 2% of the whole transaction, which can equate to a £300 fee on a £15,000 transaction. This is a common problem for businesses that trade in high value goods such as cars. It is uneconomical for the sector to absorb these extra costs and it is likely that the additional charges will be passed on to the customer in higher prices or card handling fees.
“Many dealers and auctioneers have moved to taking debit card payments from cash in order to comply with anti-money laundering regulations and they are now being penalised with higher fees.
“Following Brexit, we need to support investment, as well as business and consumer spending. We have to ensure that households have a disposable income, and dealers and auctioneers should not be forced to pass the new charges on to consumers.”
ENDS
NOTES TO EDITORS:
Rupal Rawal, Press Officer Tel: 020 7307 3412 Mob: 07528 977 157 Press Office direct line: 020 7307 3422 Press Office fax: 020 7307 3406 Web: www.rmif.co.uk Email: rupal.rawal@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.
