UK retailers warn on card fees as customers embrace electronic alternatives
23 July 2012 | 7592 views | 6
Customers are increasingly willing to use alternative payment methods such as PayPal, claims the British Retail Consortium (BRC) as it tries to scare the financial services establishment into cutting credit and debit card processing charges.
Non-card methods, mainly e-payment systems such as PayPal, Google Checkout and Amazon Payments, were used in 150 million transactions, worth £1.2 billion, last year, according to BRC figures.
The numbers are a tiny fraction of the total 9.4 billion transactions, worth £178 billion, covered by the group's survey, dwarfed by those for cash and credit and debit cards.
However, they represent a foothold for the new challengers which will only grow, with emerging payment types such as PayPal set to be accepted by half of all retailers by the end of this year, compared to just a third in 2011, the BRC says.
This is "very significant" for both retailers and banks because the average cost to a merchant of having a credit or charge card payment processed is 36.2 pence, for a debit card 9.6 pence, but for non-card methods just 7.9 pence.
Stephen Robertson, director general, BRC, says: "The message is; customers are choosing to use a payment method that doesn't always involve the banks and is the cheapest non-cash way for retailers to take money. With the market moving away from them, the banks should be making their transaction charging regimes clearer and, above all, cheaper for retailers."