August 23, 2018 / 10:47 AM / a year ago

Britons face higher card costs if no Brexit deal - UK

LONDON, Aug 23 (Reuters) - Britons will have to pay more to make card payments in the European Union and businesses on the continent could be cut off from investment banks in London if there is a no-deal Brexit, the British government said on Thursday.

In a document detailing contingency planning if Britain leaves the EU in March with no transition deal, the government said it would take unilateral action on several fronts to minimise disruption.

Nevertheless, a no-deal Brexit could still mean customers face higher costs and slower processing times for euro transactions.

The EU this year agreed to cap the fees retailers pay to process debit and credit card transactions. Without a deal between London and Brussels, the ban on cross-border surcharges would no longer apply.

“The cost of card payments between the UK and EU will likely increase, and these cross-border payments will no longer be covered by the surcharging ban,” the government said.

The government said it was committed to giving regulators like the Bank of England and the Financial Conduct Authority a “general transitional tool” to phase in changes to ease the impact if no deal is agreed.

However, the EU would also need to take action to avoid disruption in cross-border financial services, it said.

“The UK is major centre for investment banking in Europe,” the document said. “In the absence of EU action, European Economic Area clients will no longer be able to use the services of UK-based investment banks.”

Brussels has said it is primarily up to banks and insurers themselves to prepare for Brexit, such as by opening new hubs in the bloc. (Reporting by Huw Jones and Andrew MacAskill Editing by William Schomberg)

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