Cash is still the most popular form of payment in UK shops but alternative methods are increasing at a staggering rate, according to new research from…
Cash is still the most popular form of payment in UK shops but alternative methods are increasing at a staggering rate, according to new research from the British Retail Consortium (BRC).
The analysis, which looked into ten billion retail payments in 2012, found about 54 per cent of all transactions in the UK were completed using physical money.
Debit cards remained a popular choice, but it was non-cash, non-card payments that was the big winner, rising from less than two per cent to five per cent of the total.
With more people falling into credit card debt, it is perhaps a positive sign that many are turning to debit card payments instead, with 30 per cent of all transactions being attributed to them.
Cash use has declined as a percentage both of number of transactions and money spent – down 6.7 per cent and 9.7 per cent respectively. This is the first time in the survey's 13-year history that both measures have seen a decline.
The survey also found banks continue to levy unjustifiably high charges on retailers for handling card payments. The average cost a retailer has to pay for processing a credit card payment was 25 times higher than for cash (38p versus 1.5p).
Credit and charge cards account for only 10.6 per cent of transactions but over half (50.1 per cent) of costs and total costs associated with those cards were up by seven per cent, even though use is down on the previous year.
Though it is a good sign more people are staying away from high interest credit cards to avoid falling into debt, there are many who are still using them to get by and this should not be a long term plan for those looking to emerge from their money troubles.
Helen Dickinson, director general of the BRC, said: "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."
By Joe White