Banks "making moves to replace cash", retailers fear

Plastic payment card issuers are engaged in "a self-serving attempt to rake in millions", according to the British Retail Consortium (BRC).

The strongly-worded comments accompany the release of new BRC figures, which show that cash still accounts for 54% of all transactions by number, and 32% by value.

The BRC says that banking costs for each cash sale average less than 4p, whereas retailers are billed at least 17p for a £20 credit card transaction. Its research, based on results from over 10,000 UK shops, suggests that retailers spent £317 million last year to collect all forms of payment. The cost of processing credit card payments, which the BRC says represent only 22% of turnover, made up half of this amount.

Commenting on recent campaigns by card issuers to promote plastic as a cash replacement, BRC director-general Kevin Hawkins said: "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.

"Retailers are not opposed in principle to cards taking a bigger share of the payments market but...there should be a lower, fixed fee per transaction which actually reflects the costs of processing," he added.

Card-payment association APACS, which this week published research on UK payment habits, is yet to comment on the BRC's claims.