Payment transaction costs frustrate British online retailers
Of the 2,000 British online retailers that participated in the Sage Pay survey 35% cited transactions costs as being the most frustrating part of accepting online payments. No longer is fraud their main bugbear. This now appears third on the list of frustrations with 20% after technical glitches (33%).
The Sage Pay data backs up recent research from the British Retail Consortium (BRC) that shows it costs retailers around 4 times more to accept a debit card payment than it does to take cash face-to-face.
According to The Register, retailers in the U.K. are lobbying for contactless payments to be cheaper to process than debit and credit cards which cost them hundreds of millions of pounds in processing fees each year.
“With payment technology and efficiency developing, card charges should be going down not up,” said Stephen Robertson, director of the BRC. “‘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.”
One of the reasons credit card companies such as Visa, MasterCard and American Express charge more for online transactions is the increased risk of unauthorized use.
It could be argued these increased costs are offset by online retailers’ lack of overheads compared with physical stores – personnel, heating, telephones, rent, security, and so on.
