International payment cards acquirer Teller has decided to withdraw a 7.50 kroner transaction fee assessed on credit cards read using the magnetic strip after it surfaced that customers would be footing the bill.

Teller indicated in a press release that the fee, which was implemented in as an attempt to nudge retailers into ensuring that credit cards were read using their embedded microchip instead of the magnetic strip, had been scrapped because the fee was not intended to be footed by customers.

“We hadn’t imagined that the fee would be passed on to consumers,” Peter Wiren, Teller's managing director, said. “It has removed focus from our goal of improving the payment security for businesses and customers by increasing the number of chip transactions.”

The fee, which was officially withdrawn as of yesterday, lived a short life. After debuting earlier this week, it was immediately criticised, including by the newly appointed business minister, Annette Vilhelmsen (Socialistisk Folkeparti), who threatened to abolish the fee in order to protect consumers.

Teller has decided to work with chamber of commerce Dansk Erhverv, which was also critical of the fee, to come up with ways to encourage retailers to reduce the number of swiped credit card payments.

“We are satisfied that the fee has been eliminated and we will co-operate with our members to ensure that as many transactions as possible are made using the microchip,” Henrik Hyltoft, the head of marketing for Dansk Erhverv, said. “All parties involved, customers, retailers, payment acquirers and banks have a common interest in maintaining a high level of security in credit card transactions.”

Denmark was one of the first countries in Europe to implement and distribute the payment card with an embedded microchip and the terminals that read them. Many other countries in Europe have been slow to adopt terminals that read microchips, and Teller argues that this has compromised the security of payment cards in those countries. That, the organisation says, puts Danish retailers at risk of credit card fraud.

Teller also indicated that retailers can reduce the number of dubious transactions if they clean their terminals regularly and try using the chips on cards three times before swiping the magnetic stripe.