ACS has given evidence to the All Party Parliamentary Group on Fair Business Banking, detailing the issues faced by convenience retailers when dealing with banks.
The evidence session, chaired by Michelle Thomson MP, heard from Edward Woodall (ACS Head of Policy and Public Affairs), John Collins (British Independent Retail Association Finance Director) and Heather Buchanan (Director of Policy and Strategy, APPG on Fair Business Banking) about the way that small businesses deal with banks, including issues around the increasing costs of banking cash, the low rates of account switching among small businesses, and barriers to access to finance.
Research conducted by ACS in November 2016 has shown that:
- 48% of convenience retailers have reported an increase in the cost of banking cash over the past three years
- 47% of convenience retailers have been subject to increasing credit and debit card charge costs
- 85% of convenience retailers reported having no interest in switching banks
The Competition and Market Authority’s retail banking investigation found that established banks dominate the market for business customers, with only 3 per cent of business customers switching their banking provider in 2014.
As a result of the evidence session, it was agreed that further information was needed from the sector to uncover the barriers that exist for small businesses looking to switch their account or gain access to finance to fund investments.
ACS chief executive James Lowman said: “More than three quarters of retailers in the convenience sector fund investment from their own reserves, which suggests that retailers aren’t keen on approaching banks for funding and when combined with the costs of banking cash increasing alongside charges for debit and credit card payments, it is clear that there are issues with the relationship that banks have with retailers. We want to see a business banking market that is competitive and promotes the best deals to customers, and will continue to work with the APPG on Fair Business Banking to look at what can be done to make this a reality.”
The All-Party Parliamentary Fair Business Banking Group will be releasing further details of the consultation questions in due course.
For more information, or if you are a retailer that has had issues with your banking provider, please contact Steve Dowling at email@example.com.