U.K. credit card rules changed
By KEN COATES in London
A change has been made in rules governing the use of credit cards in Britain. After the Monopolies Commission condemned practice whereby creditcard firms stipulated that prices charged by retailers should be the same for all customers, whether they used credit cards, cash, or paid by cheque, the Barclav card organisation (Visa) immediately changed its policy.
The commission maintained that the “No discrimination” requirement was against the . public interest because it reduced competition. The two largest credit card organisations, Access and Barclaycard, have until now required shopkeepers to pay between 2 and 5 per cent of the sale price to them, when their cards are used. Diners Club takes between almost 4 per cent and 6 per cent of the price. . Credit card sales are thus less profitable to retailers, but shopkeepers have not been free to reduce prices for cash buyers because of a ban imposed by . the credit card organisations.
Barclays Bank credit division has freed retailers froth its . stipulation, but claitns that few shopkeepers will start charging different prices. It criticised the Monopolies Commission for hot also recommending that shops charging different prices should also state what proportion Of their turnover was going to the Credit-card company.
A shop could not add, say, 5 per cent to the cash price for Barclaycard customers — even though it paid only 2 per cent ofturnover to Barclays. The commission says Access and Barclaycard are monopolies -because of the share of .the market they hold. Access has about 36 per cent compared with Its rival’s 39 per cent. The commission says this is riot against the public interest, but the cash discount band, also run by Diners Club American Express, and other credit-card organisations, worked against the interest of the consumer. It contends that healthy competition between traders was sometimes stopped and ift some cases the practice raised prices.
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Press, 24 September 1980, Page 7
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318U.K. credit card rules changed Press, 24 September 1980, Page 7
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