Retail chiefs have attacked the charges retailers have to pay to banks for payment processing and cash collection, calling them “illogical” and “unjustifiably high”.

“The question is should this money be going into increasing banks’ profits or to keeping shop prices down for customers?,” asked British Retail Consortium (BRC) director-general Stephen Robertson.

“Reducing the charges banks impose so they genuinely reflect the actual costs involved in processing these transactions is the right answer,” he said.

His remarks were made as the BRC unveiled its Cost of Payment Collection Survey, published today.

It pointed out that on average in 2010, each retailer paid 1.7p per cash transaction to have the money transported and banked. The charge for processing a credit card payment was 37.1p and a debit card 9.2p.

As a result, although cash was used in 55 per cent of transactions, it accounted for just 11.5 per cent of retailers’ payment costs. On the other hand, credit cards are used in only 10 per cent of transactions but accounted for 44.5 per cent of the costs, while debit cards, used in 34 per cent of transactions, made up 37.5 per cent of the costs.

The BRC’s survey looked at nearly eight billion transactions in-store and online, amounting to 60 per cent of all UK retail sales.

It showed that fraud losses were cut by 37 per cent compared with 2009 largely thank to retailers’ investment in technology such as the latest secure card readers, note checkers at tills and new levels of internet security.

It also revealed that shoppers were switching from credit cards to cash and debit cards signalling a growing reluctance by consumers to spend what they do not have.

Transactions using credit cards fell by 12.9 per cent in 2010 while the proportion paid by debit cards rose by 15.8 per cent.

Although transactions involving cash were fewer than a year earlier, the amount spent in each cash transaction grew by 13 per cent to £12.93.