Whilst the popularity of cards is increasing with consumers, the costs for retailers are going up, according to new data from the British Retail Consortium.
Card payments now account for over three out of four transactions. The BRC says this has been partly driven by UK consumers increasingly using cards for lower value payments, traditionally dominated by cash. However the survey also highlighted that initial savings for retailers achieved by the 2015 Interchange Fee Regulation (IFR) have been cancelled out by increases in other card fees.
In 2017, retailers, from independent convenience stores to multinationals, spent an additional £170 million to process card payments, with the total cost reaching almost £1 billion.
As the BRC points out, the increasing card costs have been driven entirely by rising scheme fees.
Scheme fees, charged on all card transactions by Mastercard and Visa, increased by 39% in 2017, and the adverse impact of these increases has been partly masked by savings in other card charges.
The BRC is calling for regulatory action to address the issue of soaring scheme fees, which it says come at a time when the retail industry is facing acute cost pressures elsewhere.
Dave Wright, card services manager, Suresite, said: “We are constantly striving to provide the best value card payments service for our customers, however we ourselves have taken a hit with increasing scheme fees and have unfortunately have to pass on a proportion of this cost.
“There is support for a cross European campaign to challenge constant increases in scheme fees to cover the reduction in interchange fees enforced by the IFR.
“Suresite will be working closely with other industry parties to campaign against any further scheme fee introduction or rise and to include scheme fees in the IFR. We hope we will have some good news to pass on soon.”
BRC Payments Survey findings in figures: