UK retailers paid 1.1 billion pounds last year to accept customer payments
20 Oct 2020
Retailers in the UK spent 1.1 billion pounds to accept payments from customers in 2019, according to the British Retail Consortium (BRC), which is calling on the government to take action.
According to the trade body’s latest Payment Survey, card use rose steadily from 54 percent of transactions in 2016 to 61 percent in 2019. This has been further accelerated by Covid-19.
But that increase comes at a price. The cost to retailers of accepting payments reached 1.1 billion pounds last year, of which 950 million pounds was from card payments.
Card payments currently account for 4 in every 5 pounds spent in retail while they also incur the largest charges at an average charge of 18.4p per credit card transaction (up 15 percent from 2016), and 5.9p for every debit card transaction (up 6 percent from 2016).
Businesses have also received notices in the past year of new fees to be introduced that will be charged to accept online payments.
’Consumers forced to pay the price’
The BRC and other trade bodies are now urging the government to take “decisive action” to tackle excessive card costs which add to the price of goods and services. They warn that the scheme fees will not only place further pressures on retailers who are already facing increased costs due to coronavirus and Brexit, they will also be reflected in consumer prices.
Other trade bodies behind the call are British Independent Retailers Association, Association of Convenience Stores, Federation of Small Business and UKHospitality.
“With card payments accounting for almost 80 percent of retail sales, it is vital that the government takes action to tackle excessive card costs,” BRC head of finance policy Andrew Cregan said in a statement. “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 at British Independent Retailers Association, 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.”
The calls come amid a series of reviews underway by the government and the UK’s payment system regulator, with a treasury consultation on the payments landscape closing today.
Photo credit: Pexels