Firms hit out at 'consumer protection' fees

Published on Tuesday 10 November 2009 20:25

RETAILERS, already struggling with the recession, face paying hundreds of pounds in fees to comply with a new payment card security standard to protect consumers from fraud.

The Payment Card Industry Security Standards Council (PCISSC), founded by five big card brands – Visa, MasterCard, American Express, JCB International and Discover Financial Services – is stepping up efforts to get retailers to adopt its rules.

Retailers and other merchants, such as restaurants, which accept card payments must provide proof of compliance with the standard or risk being fined. The PCISSC has passed responsibility for ensuring that retailers abide by the rules on to "acquiring banks", such as Lloyds and HSBC.

But smaller retailers are protesting against the cost of the new requirements and the threat of increased fees.

Peter Ritchie, owner of the Bookworm, an independent bookshop in Edinburgh, told The Scotsman he has received letters from Bank of Scotland listing a range of fees associated with the PCISSC which total about 500.

Ritchie said he has been a business customer of the bank for 20 years, but its attitude is that he should join another bank if he is unhappy with the fees. He said: "I only received the letter from the bank on Thursday saying I had to comply by Monday. There's a whole list of fees they've sent me – if I don't comply within three months, I'll have to pay 20, after six months it goes up to 50 and then there's an annual fee."

However, he said he has been struggling to log on to the relevant section of BoS Merchant Services website or speak to anyone who can help.

Alan Calder, chief executive of IT Governance, a specialist consultant, said the standard is "unnecessarily complicated" for small businesses.

He added that certain banks, most notably HBOS, Barclays and HSBC, are putting pressure on retailers to comply if they think it will be difficult for them to take their accounts to a competitor.

A BoS spokesman said it was communicating with its merchant clients to help ensure they are compliant. He said its fees are competitive, but it would look at any individual service issues as a "matter of urgency".