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Cash use down by 14 per cent from 2009
Retailers feeling the strain of credit card charges as a result of decreased cash payments.

By Christina Williams

2 June 2014

The use of cash to pay for purchases has decreased by 14 per cent over the past five years, as customers embrace quick and convenient ways to pay for even the smallest of purchases.

Contactless technology – which allows customers to pay by credit or debit card for transactions under £20 without typing in a PIN – has contributed to decreased cash usage, along with self-service checkouts and ever-increasing online purchases.

The charges associated with digital payment however has impacted on retailers, as debit and credit card usage becomes increasingly commonplace among consumers. With the average cost of processing a credit card transaction now standing at 40.9p, the financial impact of a changing consumer mentality when it comes to paying for purchases cannot be underestimated.

“Cash use being down 14 per cent over the last five years is a milestone in the development of our digital economy,” says Helen Dickinson, director general at the British Retail Consortium. “It is disappointing that the average cost of accepting both credit and debit cards has increased over five years.

“The much-welcomed European proposals to cap how much banks can charge retailers to process card payments are close to final approval,” she continues. “But, in the meantime, we will continue to work with the UK government and payment system regulator to implement caps on UK fees without further delay.”

Despite the increased popularity of debit and credit card payments, cash remains the dominant method of payment, with 53 per cent of transactions still made in cash.


 
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