The European Parliament has just decided to cap the amount banks charge retailers when customers pay using a credit or debit card. Now you may be thinking, “Sounds great! Banks make far too much money as it is – this law will help curb their greed and save customers their hard-earned money.” However, this is a mistaken assumption as the cap spells bad news for the Great British Public.
Retailers, like banks, are profit-driven enterprises. Even if credit card charges are capped, retailers will simply leave prices as they are, resulting in a huge boost in their profit margins and absolutely no savings for customers.
The irony of the whole thing is that this legislation won’t even curb the earnings of bankers. Banks do everything they can to make-up for their losses.
They will inevitably recoup lost money from the consumer, charging us for using cash machines and accessing our bank accounts. Britain has no power to repeal EU legislation, so customers will suffer.
The EU is not only short-sighted in terms of implementing this legislation, it is blind. Other countries have such caps in place and all the evidence suggests it has severe consequences. The US and Australia, for example, have seen increased prices for goods, a surge in fees for financial services. Gaining access to your debit or credit cards is made much more difficult.
In a time when more and more Brits are using credit and debit cards to pay for goods, and banks are increasingly phasing out cheque books, Eurocrats should know better than to encourage banks to rip off their customers. Just another really good reason for us to Get Britain Out of the EU.
Dominic Kirby, Research Executive