Cash was used for less than half of all retail transactions across the UK in 2015, according to the British Retail Consortium (BRC).
The BRC’s annual payments survey looks at the methods of payment that UK shoppers used in 2015 when buying goods in-store and online, how this differs from previous years and the average cost to the retailer for handling each method of payment.
Of all retail transactions in 2015, the use of cash fell almost five percentage points, down to 47.15% from 52.09% the previous year. This is the largest percentage point drop for five years and means that almost 20% fewer transactions are now made with cash compared with five years ago in 2011.
BRC director of business and regulation Tom Ironside said: “Though the use of cash has been in decline for some time now, 2015 saw a significant dip. Crucially, retailers are seeing cash used in under half of all transactions for the first time, marking a real watershed in the payments landscape. However, cash remains an important payment method for many customers and will be with us for years to come.
“It seems that more and more of us are turning to our debit cards to make payments, especially as new contactless technology is proving incredibly popular for those lower value transactions – that used to be the mainstay for cash.
“This change has been made possible by retailers investing heavily in new payments technology, making it easier and quicker for customers to securely complete transactions in-store. Card issuers are also driving this change in customer behaviour, with around 55% of cards currently in use now featuring contactless technology.”
The BRC also found that the cost of handling debit and credit card transactions for those retailers participating in the survey has reduced by around £159 million.
These savings are due to early changes made available to some retailers by debit and credit card schemes, in advance of the implementation of the new Interchange Fee Regulation.
The full impact of the changes under the regulation should be experienced by all retailers from 2016.
“Therefore we’re delighted that all retailers will shortly feel the benefits of the Interchange Fee Regulation. It’s a shame that some smaller retailers weren’t able to benefit from changes made in advance of the regulation coming into force; further evidence, perhaps, of the necessity for better regulation in this area.”
BRC: “Retailers are seeing cash used in under half of all transactions for the first time, marking a real watershed in the payments landscape”