Yahoo Finance Cash payments now account for only 20% of UK spending
Only 20% of spending in the UK is now paid for using cash, according to new figures from the British Retail Consortium.
Debit and credit cards accounted for almost 80% of sales by value in 2018, with credit cards overtaking cash for the first time, the figures show. Debit cards, which accounted for about 57% of sales by value, remain by far the most popular payment method.
Credit and charge cards accounted for 21.5% of the total value of sales, slightly ahead of the 20.4% of spending made using physical cash.
The total value of purchases made using cash dropped by 3.7% to £77.7bn in 2018, from £80.6bn in 2017.
But because cash remains popular for smaller transactions, it was still the second most popular payment method when it came to the number of transactions.
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Some 7.7 billion transactions were completed using cash in 2018, behind the 9.3 billion made using debit cards, but significantly ahead of the 2.6 billion made using credit and charge cards.
The average value of a transaction made using cash remains around £10, but fell slightly on the same figure in 2017.
The British Retail Consortium, which has been running the survey for over 20 years, said that the figure has been around £10 for a number of years.
It was only in 2016 that debit cards overtook cash to become the top payment method in the UK.
But the switch has prompted retailers to call for a reduction in card and transaction fees.
In 2018, retailers paid £1.3bn to third-party firms just to accept card payments from customers, £70m more than they paid in 2017.
Because each card transaction on average costs retailers around 6p, cash remains by far the most cost-effective payment method for retailers.
“With card payments accounting for almost 80% of retail sales, it is vital that the government takes action to tackle the soaring costs that card companies charge retailers,” said Andrew Cregan, a policy adviser at the British Retail Consortium.
