Retailers say contactless payments have become cheaper than cash, as the future of 1p and 2p coins comes under scrutiny.
Prime minister Theresa May moved to dismiss claims that the copper coins might be scrapped as part of the Treasury’s review of cash and digital payments.
However, retailers told RN it now costs them less to accept debit card payments than cash because of rising bank charges.
Bal Singh, who owns a Nisa Local in Birmingham, said that while debit card fees were 0.35% of the value of a transaction, banking cash costs him between 25p and 50p per £1,000 – the equivalent of 0.025% to 0.05%.
“Banking charges are ridiculous compared to what they were two or three years ago,” he said. “I’m encouraging our customers to spend on their debit cards. I wouldn’t have said that two years ago.”
Chris Noice, head of communications for the Association of Convenience Stores (ACS), said it was seeking members’ views for the Treasury consultation, but cash was still the method used for 75% of transactions.
He added the provision of ATMs was its most pressing concern, since the proposed increase in interchange fees by Link could mean cash machines are removed or charges introduced.
“Free cash machines are extremely important, not just for the convenience sector but for local areas, the markets and stores that rely on cash. Losing those would have an enormous effect, particularly in isolated areas,” he said.