Cash remains the most popular way to pay for goods in the UK retail industry, despite usage falling by 10 per cent in 2012, research by the British Retail Consortium (BRC) has found.
It is first time in the survey’s 13-year history that the number of cash transactions and the total amount spent with cash have fallen.
Use of debit cards, vouchers and online payments such PayPal all increased over the same period, while credit card use declined as individuals try to better manage their finances.
It comes during a period of fundamental change in the retail industry as customers embrace new technology and ways to shop, which is affecting traditional payment methods.
The survey, which looked at 10 billion retail payments in 2012, found:
- More than half of transactions are paid in cash (54.4 per cent)
- However, cash use declined in both number of transactions (down 6.7 per cent) and in money spent (down 9.7 per cent)
- Alternative payment methods such as PayPal and money-off coupons now account for five per cent of transactions.
- The survey also found ‘disproportionately’ high charges for retailers handling card payments, with the average cost for credit or charge payment processing being 25 times higher than for cash.
Helen Dickinson, director general of the BRC, 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.”