TLE campaigns to scrap the nominal card charge on card transactions.
The next time you’re asked to pay a nominal 50p or £1 charge in a shop, bar and restaurant for using your card, ask yourself why you’re paying it.
It may seem inconsequential, but a 50p charge for paying on a card is an excessive and unduly fee. We’ve all felt aggrieved at some point for paying it, but the proliferation of shops passing down the transaction fees charged by payment companies to the consumer means we’ve come to accept it. But here’s the thing; it’s not a fair charge, and it’s pushing consumers to larger corporations that don’t charge to pay on card.
That’s why TLE is campaigning to scrap the nominal fee and encourage shops, bars and restaurants to levy the charge at what is being passed on by the bank. Not only is it fairer, but it makes good business sense.
The decline of cash
Card payments are set to overtake cash in the next decade, the Payments Council has found, with the number of transactions using cash is expected to decline from 21 billion in 2012 to 14 billion in 2022. Meanwhile, the use of consumer cards is set to rise from 10 billion to 17 billion.
There’s a certainly a generational factor behind this decline, but people across the board prefer the convenience of paying by card. Rather than visiting cash machines and fishing around for change you can simply tap your card today in some retailers, so don’t inconvenience people by letting them pay.
The campaign against a nominal fee is not a campaign against businesses charging fees on card transactions full stop. Many shops and other small businesses make a fine margin on small transactions which soon gets eaten into by charges from payment companies. Rather, we believe that the cost should reflect the charge incurred by the business.
Shops, bars and restaurants are charged 8p per debit card transaction, which means if they charge 50p on a £5 transaction, they are overcharging by 42p, or 525 per cent. If the consumer pays on a credit card, the charge is 0.8 per cent and if the consumer is paying on a premium or rewards card it goes up to 1.6 per cent. That means that even the biggest card charges incurred by a business are being passed onto the consumer at a 525 per cent increase.
The business sense
This is only partly a campaign for consumers. We at TLE want to see local shops, bars and restaurants thrive in Britain, which is why we want to make the business sense of levying the correct card charges to consumers clear.
Essentially, it’s about seeing the bigger picture. Although businesses can score 50p or £1 from a consumer and thus considerably enhance takings on a single transaction, will that customer come back again? With a proliferation of big businesses now littering UK streets that don’t charge on card payments there is a cheaper alternative there.
What’s more, you are giving your customer an unlimited budget to spend. Unlike cash, which is limited to the notes in your pocket, those who use card have been found to spend more. American Express (a rewards card) has run countless studies that prove people who use their card spend more in-store.
And finally, look after your customers and they’ll look after you. In an age of hyper localism, customer loyalty may just be the trick to bring the big corporates down.
Take a look at our campaign page for more information