The cost of convenient shopping

A report released by the British Retail Consortium (BRC) exposes the cost of taking electronic payments experienced by retailers across the UK. Although the report focusses on face-to-face payments, the findings are not surprising. In Sage Pay's own e-business benchmark report, over a third of respondants said that the most frustrating thing about trading online were transaction costs.

The BRC's other key findings include:

• The total annual costs associated with the collection of payment from the responding retailers amounted to £588 million of which :

• 81.2% (circa £478 million) is being paid directly by retailers to the banks in merchant service charges (including the interchange and card scheme fees payable to the banks, card issuers and card schemes) for all card types.

• £278 million (47% of total) is spent on credit cards acceptance - yet these transactions only represent 11% of total transactions.

• The use of cheques continued to decline as retailers became more selective on the type of  cheques they accepted – less than 1% of transactions and turnover

The BRC also announced its plans to encourage the reduction of bank payment processing fees.