The British Retail Consortium is calling on the Government to crack down on debit and credit card fees, as consumers increasingly forego cash payments in favour of spending with plastic.
The latest data from the BRC shows that credit card spending overtook cash spending in 2018, while debit cards remain the most popular method of payment, accounting for almost three-in-five transactions.
The use of cash payments has been falling steadily. Over the past five years cash use has dropped from over half of all transactions in 2013 to under 40% in 2018. The value of those cash transactions has fallen from 28% to 20% during the same period.
As cash use declines, the BRC says card costs continue to rise, resulting in £1.3 billion in third party spending by merchants, up £70 million from 2017. Each transaction cost retailers an average of 5.85 pence per transaction, up 17% (from 4.98 pence).
The retail lobby group claims the additional costs are largely driven by the fees paid by businesses to credit and debit card companies, that increased by over 50% in 2018.
The BRC is calling for action to improve regulation of card payment fees, expanding and simplifying the regulation to cover the full range of transactions and prevent abuse by card companies.
Andrew Cregan, policy advisor payments and consumer credit, says: “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.”