Retailers pay £1.1bn to accept customer payments

The cost to retailers of accepting payments reached £1.1bn in 2019, of which £950m was from card payments.

It comes as the BRC launched its latest Payment Survey, that reveals card use has continued to rise steadily, from 54% of transactions in 2016 to 61% in 2019. 

This trend has accelerated under the pandemic, which has led to more customers shopping online or paying by card in store.

While card payments now account for four in every five pounds spent in retail, they also incur the largest charges for retailers, with shops charged an average of 18.4p per credit card transaction and 5.9p for every debit card transaction, up by 15% and 6% since 2016 respectively. 

In addition, businesses have received notices in the past year of new fees that will now be charged to accept payments online. The BRC has argued that increasing scheme fees “place further pressures” on retailers. 

Alongside the British Independent Retailers Association (BIRA), Association of Convenience Stores, Federation of Small Business and UKHospitality, the BRC is now calling for “decisive action” to tackle increasing scheme fees, “protecting Britain’s businesses and consumers from excessive card costs which add to the price of goods and services”.

Andrew Cregan, head of finance policy at the BRC said: “With card payments accounting for almost 80% of retail sales, it is vital that the Government takes action to tackle excessive card costs. Without action we will see businesses put under further pressure and it will be consumers who are forced to pay the price.”

Jeff Moody, commercial director, BIRA said: “The contracts available to large national chains are often not available to individual smaller independent retailers, with card transactions now the majority of their payment transactions, these costs are therefore being felt by consumers.”

James Lowman, CEO, Association of Convenience Stores, said: “The way that customers pay in convenience stores is continuing to diversify and the costs that must be met by retailers to provide these options are rising. 

“Recent years have seen the financing of ATMs undermined, causing many machines to become fee-charging regardless of retailer preferences, and some parts of card fees double for retailers.”

He added: “There are two priorities for retailers here: everyone would benefit from a restored national network supplying access to cash, and action is needed to allow retailers to effectively find the best deal and switch card payments providers.”

David Sheen, public affairs director, UKHospitality said: “The events of the last few months have accelerated a move towards the use of card payments across hospitality, with many now not accepting cash on safety grounds. The sector needs to be protected from excessive fees for doing the right thing.”

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