Source · Select Committees · Treasury Committee
Recommendation 116
116
Deferred
Commit to transparent payment acceptance costs and commission independent cost model
Recommendation
HM Treasury must commit to ensuring that costs of accepting payments by payment method are transparent so that businesses of all sizes can make informed choices on payment methods. HM Treasury should commission work to produce a model of costs produced independently of payment providers. (Recommendation) 47
Government Response Summary
The government's response discusses the importance of financial inclusion and legal obligations under the Equality Act, explaining that businesses decide payment methods and the Act does not mandate cash acceptance, thereby deflecting from the recommendation to ensure transparency of payment costs and commission an independent cost model.
Government Response
Deferred
HM Government
Deferred
The Government agrees it is important that businesses and organisations of all shapes and sizes have access to clear and transparent information regarding payment methods. It is vital businesses are able to make informed decisions about the methods of payment they chose to accept. There is currently data available from the British Retail Consortium5 which provides a detailed and informative overview of the cost of offering and accepting different payment methods. The 2024 British Retail Consortium Payment Survey calculated the cost of processing cash transactions as £0.0258 per transaction. The average cost of processing a debit card payment was 0.27% of the value of the transaction. The cost of accepting specific payment methods will be unique to each firm and depend on a range of factors including size and the services they require. Furthermore, there is ongoing work to ensure the cost of paying by card is affordable and clear. The PSR has consulted on plans to improve the transparency of scheme and processing fees for both merchants and 5 2024-payments-survey.pdf acquirers.6 This will allow firms to make better choices about the methods of payment they accept and the companies they partner with to provide specific services. Recommendation 4 In discharging its responsibility for national security and resilience, HM Treasury must consider the value of physical cash in emergency preparedness. This may include recommending that cash is held by individuals in case of emergency, and considering what role cash distribution might play in a severe payment systems outage.