Paying by cash on the increase, according to new survey
A survey by the British Retail Consortium has revealed that paying with cash is more common than a year ago and that accepting customers’ payments by cash is, on average, 24 times cheaper for retailers than credit card payments.
The findings from BRC’s latest annual Cost of Payment Collection Survey showed that cash was used in 5.7% more transactions in 2011 and accounted for 58% of all transactions. However, the cost of the average shopping basket fell to £10.45 in 2011 from £12.93 in 2010.
The BRC said the survey also showed that banks are continuing to levy “unjustifiably high charges” on retailers for handling card payments. The average cost to a retailer of having a credit or charge card payment processed was shown to be 36.2 pence while for a debit card it was 9.6 pence. But the cost of having cash transported and banked averaged just 1.5 pence, down from 1.7 pence the previous year as retailers invest to achieve greater efficiency.
The BRC survey also found cash was the quickest way to pay taking an average 27 seconds, compared with an average 36 seconds for a card payment.
Never Miss a Retail Update!Tom Ironside, British Retail Consortium Director of Business and Regulation said: “Customers have less money. They’re buying things only as and when they need them, shopping more often but spending less each time, and they’re more likely to be paying with cash.
“In 2010 financial worries were putting people off running-up debt and they turned away from credit cards. Now times are even tougher and overall card use is down by 10.5% as people have switched to cash to better manage their spending.
“But retailers are not cheerleaders for cash. Retailers sell things. Paying is a necessary final stage. It should be easy for customers to do that in the ways they want to and the cost to retailers should fairly reflect the costs banks face in processing those payments.
“There can be no justification for such dramatic differences in charges. They’re an unjustifiable tax on retailers and customers. And more efficient technology should result in charges going down not up.
“That was the basis of our European case against MasterCard’s charges and the judges agreed they were anti-competitive and must be removed. Our evidence shows fees on domestic cards transactions are also unjustifiably high. The Office of Fair Trading should follow the landmark European ruling with rapid action in the UK.”
