Cash still the payment method of choice for UK shoppers
The British Retail Consortium (BRC) analysed 10 billion retail payments in 2012 and found that over half of transactions were paid in cash.
Credit and charge card use was down by 3.4% as a percentage of transactions but payments made on debit cards were up by 3.2%.
Cash use, although still popular, has declined as a percentage both of number of transactions and money spent. This is the first time in the survey’s 13 year history that both measures have seen a decline.
Use of alternative payment methods more than doubled on the previous year, driven by manufacturers’ money-off coupons and the rapid growth of comparatively new ways to pay such as PayPal and online payments, which now account for 5% of all transactions.
The survey also found that banks continue to levy unjustifiably high charges on retailers for handling card payments. The average cost to a retailer of having a credit or charge card payment processed was 25 times higher than for cash.
Helen Dickinson, director general of the British Retail Consortium, said: “New ways to pay and new ways to shop are shaping the retail landscape like never before. Changing customer preferences are driving the increase in debit card use – they’re helping people to manage their money better and are a natural fit for online shopping and self-service checkouts.
“Cash is still the most popular way to pay, but our survey shows how rapidly alternative and emerging methods are gaining ground, with growth more than doubling on the previous year, albeit from a low base. These methods will be the ‘ones to watch’ in the future, and retailers are investing heavily to make sure their customers have choice and convenience in ways to pay, whether in-store, at home or on the move.
“Against a backdrop of greater retail efficiency and innovation, the one jarring note is that charges remain disproportionately high. They continue to rise even though credit card use has fallen. It beggars belief that retailers incur average charges of 38p per credit and charge card transaction, 25 times more than for cash.
“Retailers have been arguing this in court for more than a decade now, and a resolution to the case is long overdue. The right conclusion would reduce these excessive costs for retailers and support their ability to invest and innovate.”