BBPA: cash-based businesses such as pubs could be unfairly burdened

05-Jun-2018 - Last updated on 05-Jun-2018 at 14:00 GMT

Unfair burden: BBPA fears cash-based businesses could bear the brunt of a shift towards digital payments

The British Beer & Pub Association (BBPA) has responded to the Treasury’s consultation on cash and digital payments in the new economy.

The consultation comes in the wake of global payment business Visa’s system failure on 1 June, which left some customers unable to make purchases.

Nicky Morgan, the chair of the Treasury committee has since written to Visa’s chief executive for Europe, Charlotte Hogg, to establish what went wrong, ensure that there won’t be a repeat and determine whether or not compensation will be available to customers or merchants.

While the BBPA has acknowledged the growing trend towards digital payments, it has urged the Government to be cautious in its involvement in the payments market as unintended knock-on effects are still being felt by cash-based businesses.

As an example, the BBPA highlighted the recent implementation of the EU Payment Services Directive, which came into force in January 2018.

Since its implementation, the directive has meant that many pubs require a minimum spend to offset the cost of providing digital payment services – which can be as much as 20p per transaction to the publican – without passing the cost on to customers through raising prices.

Given the average cost of a pint in the UK is £3.39 for beer and £3.05 for cask ale, many pubs set a minimum spend on digital payments to ensure they don’t cut too deep into their already squeezed margins.

Finally, the BBPA reminded the Treasury that cash-based entertainment options such as betting machines and snooker tables form an important part of a pub’s offer.

Should the Government continue to legislate around digital payments, the BBPA would encourage them to look at accepting digital payments for entertainment options, reasoning that keeping two distinct systems is a costly practice for businesses.

BBPA chief executive Brigid Simmonds said: “A shift towards digital payments across the world of commerce is clearly taking place.

“While this can be good for busy pubs where payments at the bar are much faster for customers, Government intervention towards such innovation needs to be well-thought through.

“If not, cash-based businesses such as pubs could be unfairly burdened.

“In due course, it would be good to see an increase in the maximum limit for contactless payments from £30 to £50.”