Debit cards have overtaken cash for the first time to emerge as the numero uno payment method in the UK in 2016, reveals a report by the British Retail Consortium (BRC).
Cards accounted for over 50% of all retail transactions by volume as Brits are increasingly using cards for lower value transactions, according to the BRC’s annual payments survey.
The share of debit card payments rose by 4.5% to nearly 43% of all retail transactions, whereas cash saw a 4.9% decline in its share of retail purchases to account for 42%.
The growing popularity of card payments can be attributed to a number of factors, including the rise of contactless payments and the growing number of retailers which have invested in technology to accept cards, contactless payments, and new payment applications both online and in-store.
BRC said that that its campaign on interchange fees has proved beneficial for customers, with the new EU rules helping to save around £500 million for retailers and their customers.
However, BRC has cautioned that the government should ensure these benefits are maintained after Brexit.
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The report further highlights that despite these savings from the Interchange Fee Regulation, retailers spent over £1bn in 2016 to accept payments from customers and the cost of processing cards remains high, particularly for credit cards.
BRC policy advisor- payments and consumer credit Andrew Cregan said: “A growing number of retailers have invested in payment technology to accept cards, contactless payments and new payment applications both online and in store.
“In part, this has been facilitated by the Interchange Fee Regulation (IFR), which was introduced across the European Union following a successful campaign by the BRC and has led to a significant fall in the cost of collection that benefits retailers and their customers.
“Looking ahead, the Government should act to retain the benefits of the IFR for retailers and their customers after the UK leaves the EU and introduce further regulatory action to address the alarming increase in other card fees and charges at a time when the retail industry is facing acute cost pressures elsewhere.”