Retailer lobby group are calling on the UK Government to crack down on the fees charged by Visa and Mastercard as more consumers switch from cash to cards.
The latest payments survey from the British Retail Consortium (BRC) shows card use continuing to rise steadily from 54% of transactions in 2016 to 61% in 2019.
At the same time, the cost to retailers of accepting payments reached £1.1 billion in 2019, of which £950m was from card payments.
While card payments account for four in every five pounds spent in retail, they also incur the largest charges with shops charged an average of 18.4p per credit card transaction (up 15% from 2016), and 5.9p for every debit card transaction (up 6% from 2016). Furthermore, businesses have received notices in the past year of new fees that will now be charged to accept payments online.
The BRC says the overall increases in scheme fees - 39% in 2017 and 56% in 2018, measured as a percentage of turnover - were "clear demonstrations of an abuse of market dominance".
The BRC, together with the British Independent Retailers Association, Association of Convenience Stores, Federation of Small Business and UKHospitality have come together to call for decisive action from the Competition and Markets Authority to tackle increasing scheme fees.
The calls come amidst a series of reviews underway by government and the UK’s Payment System Regulator, with a Treasury consultation on the payments landscape closing today.
Andrew Cregan, head of finance policy, British Retail Consortium says: “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.”
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