The British Retail Consortium (BRC) has called on the UK Government to do something regarding rising card fees.
This comes as the retail lobby group launches its latest payment survey. The survey shows that credit card spending overtook cash spending in 2018. However, debit cards remain the most popular method and account for almost three-fifths of all transactions.
Cash transactions in the UK have been slowly falling. According to the BRC, cash use has fallen from over half of all transactions in 2013 to under 40% in 2018. Furthermore, the value of cash transactions has dropped from 28% to 20% in the same time.
Total UK retail sales slightly rose by 4.1% to hit £381bn ($475bn) from £366bn the previous year.
In addition, there were 20.1 billion transactions in a single year, growing from the 19.8 billion in 2017.
Card costs and the BRC
On the other hand, card costs continued to rise. Retailers spent £1.3bn with third parties, up £70m from 2017. Each transaction cost retailers on average 5.85p, a 17% increase from the 4.98p in 2017.
These were largely attributed to the fees paid by businesses to credit and debit card companies, fees which increased by over 50% in 2018.
The BRC are calling for action over card costs. It wants to improve regulation of card payment fees. The plan is to expand and simplify the regulation covering the full range of transactions and also prevent abuse by card companies.
In addition, the BRC is concerned about the UK’s departure from the European Union. It believes that the move will result in British retails paying more to accept foreign issued cards and will increase the costs for business going forward.
Andrew Cregan, Policy Adviser Payments and Consumer Credit, BRC, said: “With card payments accounting for almost 80% of retail sales, it is vital that the Government takes action to tackle the soaring costs that card companies charge retailers. Without action we will see businesses put under further pressure and it will be consumers who are forced to pay the price.”