However, the BRC’s Payments Survey found that debit cards remained the most common method of payment, increasing to 62% of transactions. Taken together with credit cards, card payments accounted for more than 75% of transactions and 85% of spending.
The BRC found that in 2023 overall, customers visited shops more frequently but made smaller purchases as the cost-of-living crisis continued. The total number of transactions rose from 19.6 billion to 21 billion, while the average amount spent per transaction fell from £22.43 to £22.03.
Meanwhile, card fees paid by retailers continued to grow. The total amount paid by retailers to banks and card schemes rose by more than 25% in 2023, at an extra cost of £380m. This brought the total card fees paid to £1.64bn.
Rising fees
The BRC accused card companies of continuing to raise fees “without transparency or justification”. The trade body said it hoped that the Payment Systems Regulator (PSR) would implement “meaningful reforms” to tackle the lack of competition and rising costs.
The BRC said that cash remains a vital form of payment for a sizeable minority of the population, particularly for its role in budgeting, and that this has made it important to many households during the recent cost-of-living squeeze.
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All large retailers are committed to accepting cash in their stores, which has a lower processing cost than other forms of payment. The BRC welcomed the new Financial Conduct Authority (FCA) rules introduced this year to support consumers’ continued access to cash. However, it called for a reform of card costs to help hard-pressed retailers.
Chris Owen, BRC’s payments policy adviser, said: “Persistent inflation and the cost-of-living crisis continued to affect households across the country and many consumers used cash to budget more effectively.
“However, the dominance of card payments continues apace, accounting for over 85% of spending. Card fees continue to rise at a substantial rate and the PSR must act upon the harms it has identified in its current market reviews. It must move swiftly to reform the market and implement remedies including price caps on fees and price rebalancing measures.”
