New data published today shows that a majority of the UK public oppose the rising and unregulated costs British businesses face for simply accepting payments.
With the cost of doing business at record levels, the report, published by the Axe The Card Tax campaign, urges the Government to clamp down on these hidden fees in the upcoming Budget.
The campaign coalition represents 240,000 businesses and includes major trade bodies.
The most egregious rises are scheme and processing fees, which the campaign estimates have increased by a staggering 600% since 2015. These fees, which are set unilaterally by card schemes, are estimated to cost British businesses nearly £2bn every year. 99% of card payments are made with Visa and Mastercard. Businesses have little option but to accept these hikes or risk not being able to use the card scheme network that makes up over 90% of payments in the UK.
Data from the campaign coalition showed that 80% of consumers want businesses to keep more of the money they take, and for payment providers to reduce their fees. The data comes as a record number of shops went out of business in 2022, with nearly 50 a day shutting their doors for good.
Hannah Regan, Financial Policy Lead at the British Retail Consortium, said: “The BRC have long campaigned for greater regulation of the costs associated with card payments. Retailers are facing turbulent times at the moment with inflation and rising energy bills increasing their costs; soaring card fees add yet another dimension to the ever-increasing pressure on the British retailers.
“Our BRC Payments Survey showed that 90% of retail spending in 2021 was made on cards, so given the dominance of cards in the UK market, it is absolutely crucial that HMT take the time to assess if the market is working competitively, fairly, and if the regulation in place is fit for purpose.
“In addition, we urge the PSR to freeze all fees to ensure they can conduct their reviews thoroughly and that the market cannot be taken advantage of during that time.”
The Federation of Independent Retailers National President Jason Birks said: “Since Covid, small retailers have come under increasing pressure to accept debit and credit cards as payments. However, many of the products purchased from our members’ stores are small ticket items. Many members are, therefore, reluctant to incur the card processing fees. There are also concerns about the costs of setting up card terminals, rentals, and the card processing costs. The Fed exists to help make members money, save them money, and make business easier which is why we are pleased to support the Axe the Card Tax campaign.”