Customers are increasingly turning from credit
cards to cash and debit cards in a bid to better manage their
finances and curtail spending money, says new figures from the
British Retail Consortium (BRC).
The BRC’s Cost of Payment Collection
Survey 2011 includes results from nearly 8bn
transactions in store and online during 2010, adding up to 60% of
UK’s total retail sales.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
According to the data, the proportion of
transactions using credit cards fell by 12.9% in 2010 while the
usage of debit cards rose by 15.8%.
Cash was involved in a smaller number of
transactions when compared with a year previous, yet the average
amount spent in each transaction increased by £12.93 ($20.66).
“Hard-pressed customers are switching to cash
and debit cards for the reassurance that they can’t spend what they
haven’t got,” said Stephen Robertson, the BRC’s director
general.
“Use of credit cards has dropped sharply and
cash remains king.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataFraud losses fell by 37% compared with 2009 as
retailers invested in technology such as secure card readers, new
levels of internet security and note checkers at tills.
A constant source of tension between retailers
and banks is that of processing fees and this shows no sign of
diminishing. Retailers paid out a total of £659m to banks in
payment processing fee and cash collection during 2010.
On average, each retailer paid 1.7 pence per
cash transaction to have the money transported and banked and the
average charge for processing a credit card payment was 37.1 pence
compared with a debit card average of 9.2 pence.
Cash is used in more than half of a retailer’s
transactions and accounts for 11.5% of their payment costs. Debit
cards – used in 34% of transactions – makes up 37.5% and while
credit cards are only used in 10% of transactions, the payment
method accounts for a staggering 44.5%.
