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Banks accused of milking UK businesses

The British Retail Consortium (BRC) has today come out in support of UK retailers who believe that "unjustifiably high" fees on credit and debit card sales are impacting upon their competitiveness. The BRC estimates that a credit card transaction costs UK retailers 34p, debit card transactions 8.5p and cash transactions 2.1p. As a consequence additional costs of around £480 million are being taken from the economy with 76.7% of all retail spending carried out using some form of card.

Despite the fact that we now live in a near cashless society with regards to retail spending there would seem to be a massive differential between the cost of transactions completed with a credit card and those completed with cash. Whether or not we would actually see the estimated £480 million of additional costs returned to consumers in some way, if costs were realigned, is debatable but this is a significant annual "charge".

It is unclear whether these charges have increased over the last couple of years as banking institutions look to open other avenues of income. However, the myth of "free banking" in the UK is in many ways something of a joke due to a variety of charges targeted at not only businesses but the UK public as a whole.

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