Card payments accounted for almost 80% of retail sales in the UK last year, according to a new industry report that confirms the steady decline of cash usage in transactions.
Debit cards remained the most popular method of payment for British consumers, accounting for almost three in five (56.8%) sales transactions in 2018, while credit and charge cards (21.5%) exceeded cash (20.4%) for the first time, the British Retail Consortium (BRC) said.
The industry body reported that UK retail sales rose by 4.1% to £381bn, from £366bn the previous year, with debit cards accounting for £216.4bn of the total, followed by credit and charge cards (£81.9bn), cash (£77.7bn) and non-card payments (£5.0bn).
Cash was still used more frequently than credit cards, but that was because notes and coins tend to be used for lower-value payments – and the BRC data confirmed that cash continues to be on a downward trajectory in the UK.
Over the past five years, cash use has dropped from more than half of all transactions in 2013 (52.8%) to 38.3% in 2018, while the value of those cash transactions fell from almost 28% to 20% over the same period.
However, the BRC emphasised that cash remains an important part of retail sales, particularly for vulnerable people – perhaps those who struggle to use digital services or who don’t have bank accounts of their own – and said it would continue to campaign for the long-term viability of ATMs.
The BRC also warned that Brexit will result in British retailers paying more to accept foreign issued cards, increasing costs for business in the future, and further urged the government to act on another consequence of the gradual move towards a cashless society – the fees retailers have to pay to card and fintech providers.
According to the BRC, card costs are continuing to rise with UK retailers having to pay £1.3bn to third parties in 2018, up £70m from the previous year. That equates to 5.85 pence per transaction, up 17% (4.98 pence) in 2017.
“With card payments accounting for almost 80% of retail sales, it is vital that the government takes action to tackle the soaring costs that card companies charge retailers,” said Andrew Cregan, policy adviser at the BRC.
“Without action we will see businesses put under further pressure and it will be consumers who are forced to pay the price,” he added.
Sourced from BRC; additional content by WARC staff