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29 October 2007
According to a recent report banks have been accused by the retail industry of charging too much for credit card transactions as well as debit card transactions.
Many people use credit and debit cards to shop these days as they offer ease and convenience, and eliminate the need to carry cash around or write cheques.
Accepting credit and debit card payments is also a boost for businesses, as it can increase custom enabling those that do not carry cash to make purchases as well as those that do pay by cash. It can also decrease the risk of huge losses in the event of a theft and reduces the risk of theft for retailers.
However, the British Retail Consortium states that the banks are taking advantage of the popularity of card transactions by charging a fee that is over the top compared to fees that have to be paid for cash payments.
According to officials from the British Retail Consortium the cost for banking cash is just four pence for every twenty pounds. However, for credit and debit card transactions this cost rockets to seventeen pence in every twenty pounds, according to figures from the British Retail Consortium.
One senior official from the British Retail Consortium stated: "Banks have long abused their position by imposing much higher charges on retailers for processing card payments than cash. Clearly the banks have spotted that replacing cash with cards would mean a further boost to their profits."
According to the result of a survey carried out by the British Retail Consortium card transactions are very popular and make up around thirty two percent of all transactions carried out in shops, supermarkets, and stores. However, cash is still the most popular method of payment at present, and makes up around fifty four percent of transactions at retailers.
The charges imposed by card issuers to retailers for accepting card payments has been under investigation for some time according to reports. These fees, known as interchange fees, are now to be further investigated by the Office of Fair Trading, which announced its intention to get involved earlier this year.
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