The National Franchised Dealers Association (NFDA) and National Association of Motor Auctions (NAMA) have written to the Payments Systems Regulator, calling for an automotive industry exemption for debit card charges.
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 – according to the associations – it 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.
Indeed fees have reportedly increased from between 40 to 60 pence per transaction, to 2 per cent of the whole transaction, which can equate to a £300 fee on a £15,000 car.
“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”, Sue Robinson, director of the NFDA commented.