But this went off the rails when its retail division squealed about the pain these higher transaction charges were inflicting on the group’s own supermarkets and customers’ desire for a Visa-branded card in order to pay for their Olympics tickets.
This was a component of the confused strategy that had been emanating from the retailer’s banking division and may have played a part in the forthcoming departure of its boss Andy Higginson. His precarious position had been predicted in May on Retailinsider.com [See article here].
The worst hit will be small shop owners and those retailers that typically have a high percentage of sales derived from credit card customers. Robert Jarrett, director at BIRA (British Independent Retailers Association), told Retailinsider.com that in relative terms the extra charges on these ‘premium cards’ was hurting his small retailer members more than the large operators because they were less able to absorb the costs.
Tesco has maybe missed a trick because it could have taken the initiative and made sure all its cards were the lowest rates in the market and shamed the others into doing the same. This would have enabled it to truly take advantage of its original stance of being the so-called ‘people’s bank’ and used this to fight the corner of retailers and consumers against the banks and card schemes.