It’s only fair that card fees are knocked on the head

The news that we’re using less physical cash in the UK than at any other time in history means there has been a consumer behaviour revolution. The public has, on a wholesale basis, abandoned of cash in favour of the trusty chip ‘n’ pin. But somehow, the flexibility doesn’t seem to have resulted in any more ‘freedom’.

The fact that we all want to pay on card these days represents a fantastical victory for the likes of Visa and the whole gamut of card companies. What a brilliant idea: get the world’s consumers to ditch cash and spend using your system, and then take a cut of practically every transaction under the sun.

Yes, it’s only a small percentage of the transaction (typically around 0.8%, according to CMS Payments Intelligence, which campaigns against the fees on behalf of store groups), but the fact that it sounds small doesn’t necessarily justify it.

On a billion pounds’ worth of retail revenue, this represents £8m. On the £321 billion spent with retailers in the UK alone last year (including online), that’s just over £2.5 billion. For being a card company.

It is right, therefore, that the EU is seriously considering arbitrary caps (to favour the retailer) on how much the card people can take as a fee. Let’s not pretend that retailers lose out – most will pass on the levy to the consumer in the list price of the product – but anything which helps the retailer find more margin or offer more attractive prices has to be a good thing.