UK Research Note - Payments
(21 May 2009 – UK) The UK payments market is set to radically change over the next few years as a combination of regulation and increased competition alter the landscape. East & Partners has been keeping a watchful eye on these developments and has just released the first of a series of Research Notes examining the UK payments market.
East’s first UK Research Note focussed on the fact that interchanges fees are
now, more than ever, in the spotlight. This focus has been compounded by the
European Commission which, in April 2009, instructed MasterCard to reduce their
interchange fees across Europe. The UK Office of Fair Trading has also been
investigating how the card schemes set interchange fees.
In Australia, early payment market reforms implemented by the Reserve Bank of Australia during the past decade have seen considerable reductions in interchange fees. The average Visa and MasterCard interchange fee is now just 0.5 percent of transaction value – among the lowest interchange rates internationally and significantly below those in the UK.
In East & Partners’ inaugural Research Note, East was able to draw upon its wealth of data gathered from its established Merchant Acquiring program, demonstrating the fallout from interchange reforms in Australia. As authorities around the world scrutinise interchange fees, East has found that the leading lessons from the Australian market are being watched closely by all developed international markets, particularly the UK.
In conclusion, Australian merchants have begun to feel that they wield greater power in the payments landscape, increasingly expecting acquirers to sharpen their pencil regarding costs while providing improved service performance and support.
East & Partners concluded that the shift in dynamics that has happened in the Australian market will be mirrored in the UK payments market. For more information about East & Partners UK Research Note please contact robert.m@eastandpartners.com
In Australia, early payment market reforms implemented by the Reserve Bank of Australia during the past decade have seen considerable reductions in interchange fees. The average Visa and MasterCard interchange fee is now just 0.5 percent of transaction value – among the lowest interchange rates internationally and significantly below those in the UK.
In East & Partners’ inaugural Research Note, East was able to draw upon its wealth of data gathered from its established Merchant Acquiring program, demonstrating the fallout from interchange reforms in Australia. As authorities around the world scrutinise interchange fees, East has found that the leading lessons from the Australian market are being watched closely by all developed international markets, particularly the UK.
In conclusion, Australian merchants have begun to feel that they wield greater power in the payments landscape, increasingly expecting acquirers to sharpen their pencil regarding costs while providing improved service performance and support.
East & Partners concluded that the shift in dynamics that has happened in the Australian market will be mirrored in the UK payments market. For more information about East & Partners UK Research Note please contact robert.m@eastandpartners.com
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