NatWest bank brands sentenced for overcharging interchange fees
Four banks in the NatWest stable – National Westminster Bank, Royal Bank of Scotland, Ulster Bank and Coutts & Company – have been hit with a £1.82m fine for overcharging interchange fees on debit cards credit.
The Payments Systems Regulator (PSR) opened an investigation into the banks four years ago after the problem was uncovered during a street check.
She found that banks were incorrectly treating a number of cards as ‘commercial’ cards when they should have been treated as ‘consumer’ cards. This meant that the fees charged by these banks were not capped and were set too high.
As a result, acquirers and ultimately merchants were overcharged. The PSR found that banks wrongly profited from nearly £1.2million in excess interchange fees between March 2016 and 2018.
Chris Hemsley, Managing Director of PSR, comments: “The interchange fee caps were put in place to reduce the cost of accepting customer card payments for stores and other merchants’ businesses. The banks broke the rules by not respecting the ceilings.
“Not only did the banks reimburse the acquirers for the fees they were not entitled to collect, but we also fined them for their failures.”