A recent survey by the British Retail Consortium (BRC) has found that shoppers are less likely to use cash to pay for their goods than ever before, with people more likely to pay with debit or contactless cards or to shop online.
Cash accounted for 53 per cent of the number of transactions in 2013, with debit cards accounting for 32 per cent. However, in terms of the value of transactions, plastic accounted for around half of all transactions.
According to the BRC, cash remains the most popular way to pay for a number of transactions but is down 14 per cent over the last five years and the availability of contactless cards, handy express stores and self-service tills, as well as online sales, has increased the use of debit cards for smaller payments in place of cash.
That said, the average costs to a retailer of processing a credit or charge card payment has increased by 18 per cent, to 41 pence, in the past five years, while debit card payments, on average, cost 8.8 pence to process, up 4 per cent over the same period.
A spokeswoman for the BRC said it is very disappointing that the average cost of accepting both credit and debit cards have increased over five years, while cash costs have gone down. However, Brussels is close to approving a plan to cap how much banks can charge retailers to process card payments.
According to the European Commission, the payment market in the European Union is worth around €130bn but is “fragmented and expensive”, so the EU proposes to cap interchange fees at 0.3 per cent of a transaction.
