The European Commission (EC) has proposed capping ‘interchange fees’ paid by shops to banks for processing card transactions, which if successful could reduce the charges on retailers, including charity shops, who take card payments.

Retailers pay these fees to card schemes and banks to process payments customers make using credit and debit cards. These currently vary from 0.1 per cent to 2.5 per cent, costing the UK retail market as a whole £850m a year, according to the British Retail Consortium (BRC).

The EC has proposed new regulations to cap interchange fees at 0.2 per cent of transaction value for debit cards and 0.3 per cent for credit cards. The BRC estimates this will save retailers £362m every year.

The Consortium said it has been campaigning for a decade to cap the “unjustifiably high fees”, which are absorbed into retailers’ costs.

Wendy Mitchell, deputy chief executive of the Charity Retail Association, said of the news: “On the face of it, this looks like a positive development for all retailers, though we don’t hold information on the processing charges charities pay so it is difficult to estimate impact on the charity retail sector definitively.”

In Charity Finance’s Charity Shops Survey 2012, 92 per cent of the shops covered were able to take electronic payments.

This year’s survey is out in October, and represents 15 per cent more retailers than the previous edition. You can pre-order it using the link below.

The proposed cap would first affect cross-border transactions within the EU, and then transfer to all member markets within another two years.

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