Card payments soar in UK stores but retailers are concerned over costs

More and more popular for their convenience and speed, card payments now account for 75% of all retail sales in the UK, but accepting this payment method is costing retailers almost £1 billion a year, a new report from the British Retail Consortium revealed.

Lower value payments, traditionally dominated by cash, are driving the shift towards card payments. In fact, the value of retail purchases made by cash has fallen by more than 1%, accounting for just 22% of all retail sales.

But the BRC’s latest annual payment survey, which represents 48% of the entire retail industry, has revealed that retailers are not as happy about the growing dominance of card payments as consumers.

This is because merchants must pay a fee to cover the cost of processing card transactions, forcing them to spend an additional £170 million last year. This year, the sum is expected to reach almost £1 billion.

Additionally, card scheme fees jumped by almost 40% in 2017 and are expected to rise between 30% and 100% for some transactions this year.

“EU payment regulation introduced in 2015 delivered savings for the retail industry and consumers, but these benefits have now been eroded by increases in other card fees. In fact many smaller retailers have questioned whether savings were ever passed on by card companies,” said BRC head of payments and consumer credit Andrew Cregan.

“The BRC are now looking to the Government and Regulator to tackle the alarming increases to card scheme fees imposed on retailers, and for action to simplify the complex fees and charges levied by the card payments industry.”

The increases join a string of other pressures facing small and large retail business in the UK amid economic uncertainty, growing business rates and muted consumer spending.

Copyright © 2018 All rights reserved.