Retailers have called on the Government to keep to its word on cracking down on "irresponsible banking" by cutting the excessive charges imposed for processing plastic card transactions.
The British Retail Consortium's annual payments survey shows that it costs retailers four times more to accept a payment by debit card than it does cash, but this rises to a multiple of 16 times for credit card payments. An average cash transaction costs retailers 2.1p, compared to 8.5p for debit cards and a whopping 34p for credit card purchases.
Stephen Robertson, the director general at the BRC, said: "Cash is still the most popular way of paying and the cheapest for retailers."
The BRC said that banks had hiked charges for debit card payments over the past year and that they had "almost doubled" in the past five years.
Retailers are also "seriously concerned" that banks plan to make higher debit card charging the norm with the emergence of new technology, such as contactless and mobile payment methods, that will gradually replace cash for large volumes of transactions.
Mr Robertson said: "There is no justification for such big differences in charges between cards and cash. With payment technology and efficiency developing, card charges should be going down not up."
Retailers are also unhappy that banks are creating new card products, such as "World cards", which have much higher charges for retailers, and moving consumers on to them. The BRC said these new products attract additional interchange fees, the amount from a customer transaction that must be passed on to the card issuing bank.
The BRC said that cash accounted for 32 per cent of total retail spend in 2009, down from 33 per cent in 2008 and 34 per cent in 2007.Reuse content