Credit/charge cards overtake cash for first time
The British Retail Consortium (BRC) has published a report which revealed that 80% of retail sales in the UK took place through card payments in 2018. At 56.8%, debit cards were the most popular payment method in the market.
For the first time in the market, the use of credit and charge card transactions, at 21.5%, exceeded cash (20.4%). However, the BRC emphasised the relevance of cash for people who struggled with using digital services or didn’t have their own bank accounts.
The BRC highlighted Brexit’s potential impact on retailers who will pay more to accept foreign-issued cards. Andrew Cregan, policy adviser at the BRC notes that unless the government checks the costs that card companies charge retailers, consumers will be forced to pay the price.
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.
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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.
“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.