Yahoo Finance Credit card spending overtakes cash for first time
Credit card spending has overtaken cash for the first time, according to data from UK retailers. This means notes and coins have been demoted to the third most popular method of payment.
The figures from the British Retail Consortium (BRC) – whose members are responsible for £180bn of sales – come amid warnings that millions of adults would struggle to cope in a cashless society.
In its latest payments survey, the BRC said debit cards remained the most popular payment method and that they overtook cash in 2018. Total plastic card spending accounts for almost 80% of retail sales.
“For the first time, credit card spending has outstripped cash spending,” said the BRC.
Total UK retail sales rose by 4% to £381bn in 2018, with debit card payments representing almost 57%. Meanwhile, credit and charge cards accounted for 21.5% of the total, a percentage that has remained constant over the past few years.
The cash share of the total fell to 20.4%, or just over £77bn, down from 22% in 2017 and almost 28% in 2013.
The BRC said despite the findings, cash remains an important part of retail, particularly for many vulnerable people. It said it was working to ensure the long-term viability of ATMs and reduce barriers that prevented many businesses from offering cashback to customers.
Retailers gave £1.3bn to third parties in 2018 to accept payments from customers, up £70m on the previous year.The report said this was largely driven by the fees paid by businesses to credit and debit card companies, which increased by more than 50% in 2018.
A BRC spokesman said that with card payments rising, it was vital the government tackled these costs. “Without action we will see businesses put under further pressure and it will be consumers who are forced to pay the price,” the spokesman said.
In March, the Access to Cash review said more than 8 million UK adults would struggle to cope in a cashless society. It said companies and organisations providing essential services should be required to ensure consumers can continue to pay by cash.
