Fuel Card News Motoring Updates: Bank fees force independent petrol retailers out of business
Costly bank transaction fees are putting a huge strain on independent petrol retailers’ pockets, according to an investigation by Financial Mail.
The fees charged by banks and card acquirers when processing card payments combined with the rising cost in fuel and the competition threat posed by supermarkets, is forcing independent retailers out of business.
Only 20 years ago there were 21,000 petrol stations in the UK; however this figure has fallen to 9,000, of which about 5,200 are independent.
The current problems are being caused by the growing use of premium and rewards cards that offer cashback on fuel purchases which is then passed onto the retailers in the form of higher transaction charges.
Barrie Richards, an independent petrol retailer and member of the Retail and Motor Industry’s executive committee , says he is paying an average of £28,000 a year in charges and believes the use of premium cards has ‘exploded’ in the past six to eight months.
He said: “If we accept Amex cards, it costs us two percent of the transaction, which wipes out our entire gross profit on fuel. But at least we know it is Amex upfront and can choose to decline the card.
“On other cards we have no way of knowing. My margins are being destroyed by the banks, which are keen to attract customers.”
In other news, in a survey of 500 drivers 87 percent said they would be prepared to use telematics technology to reduce their fuel consumption.
Fuel costs mounting up? Visit www.fuelcards.co.uk for the best deals.