Retailers in the UK are lobbying for emerging payment technology, viz. contactless payment, to be cheaper to process than current debit and credit cards, which are running them hundreds of millions of pounds in processing fees a year, according to The Register.
According to the British Retail Consortium (BRC), each cash transaction costs retailers an average of 2.1p to process ($.03), while debit card transactions cost 8.9p ($.13) – nearly doubled from five years ago – and credit card transactions cost a whopping 33p ($.50).
A 2009 survey from the BRC also found that 44% of purchases in the UK were made with debit cards, with cash lagging behind at 32%.
Retailers are concerned that contactless debit, credit and mobile payment will end of digging them an even deeper hole, especially considering that contactless payments are geared towards the purchase of small value items.
Stephen Robertson, director of the BRC, says the processing fee trend should be going down and not up due to improved technology and efficiency: “‘Contactless’ systems can bring benefits, but banks are currently levying charges on card payments well beyond what it actually costs them to process those transactions. They can’t expect to maintain those excessive charges as numbers of non-cash payments grow.”
Yet many retailers are dealing with just that. According to a BRC statement, some banks are even rolling out new “premium” or “World cards” that require additional interchange fees of between 0.7% and 0.9% on top of the average 0.75% of the transaction value that the retailer previously paid.
Read more here.