Mastercard is blasted for 'greed' and 'opportunism' by charging British card users FIVE TIMES the fees on items ordered from EU then blaming Brexit

  • Mastercard is hiking fees for UK shoppers buying  from EU-based companies
  • The European Union brought in a cap in 2015 amid fears over hidden fees
  • Mastercard says the cap does not apply to some transactions following Brexit 
  • Payments between UK and the EEA are now 'inter-regional', the company saysMastercard has been accused of 'opportunism' and 'greed' for increasing fees for British shoppers using debit or credit cards to buy from EU-based companies five-fold.  

    Visa and Mastercard levy 'interchange' fees on behalf of banks for card payments that used their networks. 

    The European Union brought in a cap in 2015 amid fears over hidden fees costing companies hundreds of millions of euros, meaning higher prices for consumers.

    Mastercard has now revealed that the cap does not apply to some transactions following Brexit, as payments between Britain and the European Economic Area are now technically 'inter-regional', the FT reports. 

    The company will raise its credit card charge from Britain to the EU from 0.3 per cent of the transaction's value up to 1.5 per cent from October 15, with debit card payment fees jumping from 0.2 per cent to 1.15 per cent. The change will reportedly be a benefit for British banks and card issuers rather than Mastercard, but it has sparked a backlash from companies who rely on online payments.  

    Chair of the all-party parliamentary group on Fair Business Banking, Kevin Hollinrake, said the change was 'alarming'.

    He added: 'This smacks of opportunism and I would urge the regulators to step in as a matter of urgency to ensure that financial institutions do not use Brexit as an opportunity to hike up costs that consumers will ultimately bear.' 

    Head of policy at the Coalition for a Digital Economy, Joel Gladwin, said: 'Some people might put this change down to Brexit, but it is actually just greed. It is well within the power of the card schemes to make merchants' lives easy and keep things operating as they were pre-2021.

    Visa and Mastercard levy 'interchange' fees on behalf of banks for card payments that used their networks

    Visa and Mastercard levy 'interchange' fees on behalf of banks for card payments that used their networks

    'Not only does this hurt the already squeezed bottom lines of ecommerce start-ups and subscription businesses, it comes at a time when a huge number of small businesses have shifted to online models to survive.'

    The change could mean consumers see higher costs of companies pass on the fee.

    Amazon UK domestic purchases typically go through a company based in Luxembourg. 

    A source familiar with its plans said there could be a change of location for the UK store to avoid fee increases for those who use the platform. 

    Hotels, airlines, travel groups and car rentals could also be hit by the move, according to Callum Godwin, chief economist at global payments consultancy CMSPI. 

    He added that any sector where the consumer is in Britain and the merchant is in the EU may be affected.  

    Visa told the FT that the company would aim to provide clients with 'advance notice' if a change to interchange became 'appropriate'.  The announcement is one of a series of challenges now facing Britain in the wake of the country's exit from the European Union - and the end of the transitional period.   

    Recent reports revealed up to 50 per cent of all lorries bringing goods into Britain from the EU are crossing the Channel back empty afterward as British businesses shun exporting because of Brexit red tape.

    The Road Haulage Association (RHA) said that far fewer containers filled with goods are leaving for the continent from the UK since Boris Johnson agreed a trade deal with Brussels.

    And UK businesses that export to the EU are reportedly being encouraged by trade officials to set up hubs across the Channel so they can avoid post-Brexit disruption.

    Richard Burnett, chief executive of the RHA, said: 'Most of the trucks that bring goods into the UK are not British and we've seen a noticeable reduction in hauliers wanting to make the journey'.

    He told The Times: 'There is not normal demand from exporters, which means around 40 per cent are returning to the Continent empty. They are also worried about being stuck in port if they don't have the right customs paperwork. 

    'The new Covid tests are also very unpopular and are having an effect on the number of hauliers who are prepared to make the trip.'

    Some firms claim they have been advised to set up subsidiary companies in the EU so they can avoid extra paperwork when exporting products into the trade bloc.

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