// Retailers spent £1.1bn to accept payments from customers in 2019
// The BRC & other trade bodies call for action to tackle excessive card costs as a gov’t call for evidence on payments closes today
// BRC Payments Survey shows a continued move from cash to cards in retail
Retailers had to spend more than £1 billion last year to accept payments from customers, prompting calls for the government to tackle excessive card costs.
According to the BRC’s latest Payment Survey, card use continued to rise steadily from 54 per cent of transactions in 2016 to 61 per cent in 2019.
This trend has accelerated due to the coronavirus pandemic, which lead to more customers shopping online or paying by card in store, although the BRC could not reveal exact figures for 2020 as yet.
Meanwhile, the cost to retailers of accepting payments reached £1.1 billion in 2019, of which £950 million was from card payments.
While card payments account for 4 in every 5 pounds spent in retail, they also incur the largest charges.
Shops were charged an average of 18.4p per credit card transaction, up 15 per cent from 2016, and 5.9p for every debit card transaction, up six per cent from 2016.
Furthermore, retailers have received notices in the past year of new fees that will now be charged to accept payments online.
The BRC said that the increasing scheme fees place further pressures on retailers, especially as they face growing costs as a result of Brexit and coronavirus.
It added that these costs, equivalent to £40 per household, would “ultimately” be reflected in consumer prices.
The data prompted the BRC to team up with British Independent Retailers Association (Bira), Association of Convenience Stores, Federation of Small Business (FSB) and UKHospitality to call on the government 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.
Organisations are also calling for further measures to protect consumers’ access to cash, which remains an important method of payment, particularly for many vulnerable people.
“With card payments accounting for almost 80 per cent of retail sales, it is vital that the government takes action to tackle excessive card costs,” BRC head of finance policy Andrew Cregan said.
“Without action we will see businesses put under further pressure and it will be consumers who are forced to pay the price.”
Bira commercial director Jeff Moody 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.”
Association of Convenience Stores chief executive James Lowman 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.
“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.”
FSB national policy and advocacy vice chairman Martin McTague said: “The costs that accompany acceptance of card payments represent yet another overhead for embattled small retailers.
“We urgently need to see moves to make card terminals more affordable, improve connectivity so all firms can install them, and upskill business owners so they are confident in taking contactless payments – undoubtedly the safest way to pay in this climate.
“We also have to protect access to cash for as long as consumers want and need it.
“Achieving that aim will require creative solutions from ATM providers, substantial investment in the Post Office and more freedom around in-store withdrawals.
“Let’s not forget that cash serves both as an important back-up for when card systems fail and a competitor to the handful of providers that dominate the card payment market.”