Death of cash over exaggerated according to BRC
A new study has revealed that cash still remains the preferred payment option for shoppers.
The British Retail Consortium’s annual Payments Survey shows that despite a slight decline in use, cash continues to account for over 52% of all transactions.
The study found that the average value of transactions across all payment methods fell again this year as shoppers become less reliant on large weekly shops and instead make more frequent visits to a wider variety of stores.
It also reveals that UK customers are increasingly embracing non-traditional methods to pay for their shopping. Non card replacement product (payment via app etc.) use has expanded six-fold over the last five years but still only represents a small proportion of the payments landscape.
The BRC said improvements in technology and constant innovation from retailers and payments providers means these methods of payment are likely to grow over the coming years as customers increasingly expect to be able to pay in the way that suits them best. This will require considerable investment from retailers but meeting the ever changing needs of increasingly tech-savvy customers will be a key issue in the years ahead.
BRC director general Helen Dickinson said: “Cash remains the cheapest method of payment for retailers to process and, for the moment, it remains the most frequently used method of payment too.
“We’re entering an exciting time for retail as technology continues to have a major impact on everything we do – this is just as true for methods of payment as it is for how products are sold.
“Meeting new demands from consumers, be it how and where they want to shop or how they wish to pay, retailers will need to innovate in order to continue to meet customer demand.”
The BRC said despite these technological challenges and changes in customer behaviour, the survey also shows that the cost to UK retailers of handling card payments is still too high.
It has therefore welcomed the changes that will take place at the end of the year through the introduction and enforcement of the new EU interchange arrangements.
These regulations will limit the interchange levels in respect of debit card transactions to 0.2% and credit cards to 0.3% of transaction value. However, the BRC said more needs to be done in the domestic market to ensure that disproportionate card handling fees do not stifle retailers’ ability to invest and innovate.
Dickinson continued: “The cost to retailers of accepting debit and credit cards has been increasing for years, so it’s great that European regulations will finally bring some proportionality to these fees and charges. The use of these cards is only going to continue to grow so it’s important that the issues that have persisted in this area are finally being addressed at the EU level. There remains work to be done here in the UK to address these unfair charges, though.”
