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How to pay?

Thursday, 16 August 2012

Apart from the traditional annual ‘Cash is still King’ survey from the BRC (cash was used in 5.7% more transactions in 2011, accounting for 58% of all transactions) they have recently carried out research into payment methods in use particularly focusing on retailers use of contactless, mobile and non traditional methods with those retailers included in the survey taking almost 60% of total retail spending.  Whilst this is obviously another attempt to get Banks to reduce charges to retailers, the results do contain a few warning signs on non card usage.

Non-card methods, mainly e-payment systems such as PayPal, were used in 150 million transactions, worth £1.2 billion, in 2011. One in three retailers that took part in the BRC research said they started accepting e-payments last year, and the BRC estimates that number is likely to rise to half of retailers by the end of 2012.

A third of retailers surveyed said they had accepted one of the emerging payment types - PayPal, Google Checkout or Amazon Payments - during 2011 and half indicated they will be ready to do so by the end of 2012.  The BRC said that the evolving payment methods are the cheapest way for retailers to accept payments. The average cost of having a credit or charge card payment processed is 36.2p, for a debit card it is 9.6p, but for non-card methods including e-payments it is 7.9p.  BRC found that, among the retailers it surveyed, 29.4% of all tills (and 24.8% of self-service tills) are equipped with readers that support contactless card payments. 

The BRC suggests that the report highlights the rapid changes that are occurring in the payments landscape and shows the need for financial institutions to move with the times. With the rise of mobile wallets that can be linked to reloadable prepaid cards, shoppers can circumvent banks altogether if they want to. As a result, emerging payment technologies could be "challenging the banks' market domination,"   Now that may be overstating the situation for Banks but it certainly looks like a shot across the bows.

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