Proportion of cash transactions continues to fall as consumers adopt new payent methods
Britons now spend an average of less than £10 each time they pay by cash, as shoppers increasingly switch to debit and credit cards and buy online. A report by the British Retail Consortium said that customers are using “less cash than ever”, with both the number of cash transactions and the average amount spent each time falling.It found that the average value of each cash transaction is £9.47, down 17 per cent from 2009, when it stood at £11.43.Over the same period the number of debit card transactions rose, while the average value of such payments have fallen from £31.45 to £27.58.
The consortium said this reflected shoppers increasingly paying for smaller transactions with cards instead of cash.Customers are taking advantages of new ways to shop and pay. 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.Cash still accounted for just over half of all transactions that take place, although the proportion has fallen on last year, the consortium found.
Debit cards account for almost one-third of transactions, with the rest by credit and charge cards or other methods. Because debit cards are typically used for more expensive purchases than cash, they account for the biggest proportion – almost exactly half – of all money spent, up 11 per cent over the past five years.
Last year 59 per cent of the 37 billion transactions were done with cash, a sharp decline from the 73 per cent of transactions that were made with cash just 10 years ago. This proportion is projected to fall to below 50 per cent by 2015, and to 45 per cent by 2018.
Attractions can benefit from the convenience of this increasingly cashless society – faster transactions, greater security and of course, the advanatage of leaving cash in the pocket of our visitors to spend later in the shop or cafe! However, there is a cost – on average retailers were charged almost 41p per credit card transaction and almost 9p for each debit card payment. By contrast, the cost of handling cash payments has fallen to 1.29p. European proposals to cap how much banks can charge retailers to process card payments are close to final approval, but in the meantime, the British Retailers consortium is working with the UK Government and Payment Systems Regulator to implement caps on UK fees without further delay, as has happened in other European countries.