Bank account holders benefit from more convenient payment methods
Published 23 July 2012
Bank account holders have a range of options when it comes to paying for things - and newer methods, such as PayPal and contactless payments, could force banks to rethink how much they charge for card payments, according to the BRC.
Traditional banks may have to adapt to keep up with cheaper and more convenient payment methods, according to the British Retail Consortium (BRC).
The BRC said that the growing use of mobile and online payment platforms such as PayPal and Google Checkout are reducing costs to retailers, which could be passed down to customers in the form of lower prices.
A regular debit card transaction costs the retailer 9.6p on average, while a credit card or charge card payment costs them 36.2p - so it's easy to see why retailers may want to encourage more online payments.
These online payment methods aren't completely free - PayPal takes a cut of money received using the service, for example - but it could work out cheaper than card payments for many retailers.
BRC director general Stephen Robertson said: "There are lessons here for the established commercial interests in the payments industry. Customers are adopting new ways of paying that deliver advantages for them and for retailers. Payment methods, such as mobile, PayPal, Google and similar products, are challenging the banks' market domination. Very quickly, those payment methods have gone from a standing start to accounting for £1.2 billion of retail sales per year."
An expert at thinkbanking commented: "Bank account holders are benefiting from fast and convenient payment methods that also happen to be cheaper for retailers than traditional card payments. It's now quite common to see PayPal and Google Checkout as payment options online, and some physical retailers even provide the option.
"Emerging contactless payment technology and mobile payments are arguably even simpler for buyers, so we could see traditional card payments become increasingly less popular over the coming months and years."