@DanielWebb you’re absolutely right about small retailers, but in reality nothing will change, many of them already don’t accept cards under £5.00 (rather than charging a surcharge) and can and will continue to do that. It’s not all cost based either, there are material costs to bank cash too, but those are less well understood or accounted for.
Having worked in payments for 15 years, I would say the overall legislation has been poorly reported and largely misunderstood by the public. What makes up a merchant service charge for a payment, comprises much more than a profit margin for Visa and MasterCard, or indeed interchange for an issuer like Starling. Some of it is fair game.
Consider the poster children for card surcharging: airlines and event tickets. They are not simply more greedy for booking fees. They are industries that sell services often on a 6-18 month lead time. When you use your credit card, the consumer credit act gives you the right to dispute and recover your funds any time until the service is received.
That creates a large exposure - and someone has to pay for it. The airline/event needs cashflow so receives the payments, but the bank that provides merchant services has to hedge this exposure by increasing deductions on the payments. Partly as temporary hold, but also as a larger fee to cover costs of managing risk. Airlines do not pay 0.3%!
In effect this produces a far higher payments charge to these industries, which they’ve historically passed on. It isn’t trivial either, I’ve seen airlines and even concerts/festivals bankrupt payment companies! So part of the real conversation on “win for consumers” should be: how much do you want protection on these long term purchases you make?
Sadly, I suspect in this and other areas, the law of unintended consequences will prove that while welcome, these changes don’t end up being entirely positive for consumers.