NatWest Group bank fined for overcharging on interchange fees
The UK Payment Systems Regulator (PSR) has taken action against National Westminster Bank Plc, Royal Bank of Scotland Plc, Ulster Bank Ltd and Coutts & Company for overcharging interchange fees on credit cards.
According to the regulator’s latest ruling, the bank has been fined £1.82 million for “failing to comply with important regulations”.
This issue was spotted by the PSR when in a monitoring activity found out that the banks had incorrectly treated a number of cards as being ‘commercial’ cards when they should have been treated as ‘consumer’ cards, in this the fees charged to merchants by the banks weren’t capped and ‘were set at too high a level’.
In related news, last year Amazon and Visa reached a global truce on card fees which had started with Amazon UK stopping accepting Visa credit cards.
This spat had a ripple effect when The Merchant Payments Coalition (MPC) wrote a letter to the Senate Committee on Banking, Housing and Urban Affairs and Committee on Financial Services.
In all this, both merchants and acquirers were both overcharged and the PSR found that the banks “wrongly profited from almost £1.2m in excess interchange fees between March 2016-18”.
“The interchange fee caps were put in place to reduce the cost of accepting customer card payments for shops and other merchants’ businesses. The banks broke the rules by failing to bring themselves in line with the caps”, said Chris Hemsley, Managing Director of the PSR.
The PSR originally opened the investigation on 4th May 2018.