A report by The British Retail Consortium shows that payment giants Visa (NYSE:V) and Mastercard (NYSE:MA) have made the most of the shift to cashless payments, and have almost doubled their fees on card payments over the past two years.
As the COVID pandemic speeds the transition to cashless payment solutions, the report says that consumers can expect to see their credit card bill rise by £40.
With these findings being published, calls have been made for these fees to be reduced, in order to encourage consumer activity and help the ailing hospitality and services sectors. Indeed, reduced fees would put money back in the pockets of struggling retailers and encourage them to more fully commit to more hygienic payment methods.
However, according to travel money trading service, Bidwedge, cash should still be considered a merit-worthy alternative for retailers and consumers. The company add that despite many retailers enforcing cashless payments, the WHO has not issued advice to avoid bank notes.
Speaking on the fee changes by companies such as Visa and Mastercard, Bidwedge Founder, Shon Alam, says:
“Even before Coronavirus, the use of cash was on the downturn. Now, despite the fact that the WHO never directed against the use of cash, more and more retailers and consumers have been turning to card as the main vehicle of payment. Unfortunately, as trends and demand for card payments have grown, fees have increased.”
“The industry should embrace transparency more, rather than hiking up fees, or turn to cash instead. With bank notes, there are no hidden costs; what you pay is what you get. Despite the impact of COVID, there is still a place for cash and, as these reports show, it may even be the cheaper and better option.”
Now, we ought to take this with a pinch of salt – cash is no panacea for a lack of transparency. Indeed, many small businesses are now struggling because, by being largely cash-based and not declaring all of their taxable profits, they have now exempted themselves from the full extent of support they might otherwise have been eligible for.
In contrast, with the rise of blockchain and virtual transactions automatically being listed on transaction records, cashless payments will have a large role to play in a future where transactions are more hygienic, efficient and transparent. We must now demand companies such as Visa and Mastercard enjoy their leading role in this transition, without being too greedy. Card and cashless society has a lot of potential to be a positive shift, so charges should be proportionate to costs, not an extortionate fee to access a necessary service.