The major gainers have been debit cards, and newer methods such as PayPal, as online and self-service shopping grows. Increasingly people also prefer debit to credit cards as they try to manage their under-pressure finances – leaving cash and credit cards the big losers.
The British Retail Consortium’s (BRC) Cost of Payment Collection Survey published shows that, while over half of transactions (54.4 per cent) are paid in cash, use has declined as a percentage both of number of transactions (down 6.7 per cent) and money spent (down 9.7 per cent). This is the first time in the survey’s 13 year history that both measures have seen a decline.
The survey, which covers nearly 10 billion retail payments in 2012, reveals credit and charge card use was down by 3.4 per cent as a percentage of transactions. In contrast, transactions made on debit cards were up by 3.2 per cent.
Use of alternative payment methods more than doubled on the previous year, driven by manufacturers’ money-off coupons and the rapid growth of comparatively new ways to pay such as PayPal and online payments. They now account for 5 per cent of all transactions.
The survey also shows banks continue 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 25 times higher than for cash (38p versus 1.5p). Credit and charge cards account for only 10.6 per cent of transactions but over half (50.1 per cent) of costs, and total costs associated with those cards were up by 7 per cent, even though use is down on the previous year.
Helen Dickinson, Director General of the British Retail Consortium, said: “New ways to pay and new ways to shop are shaping the retail landscape like never before. Changing customer preferences are driving the increase in debit card use – they’re helping people to manage their money better and are a natural fit for online shopping and self-service checkouts.
“Cash is still the most popular way to pay, but our survey shows how rapidly alternative and emerging methods are gaining ground, with growth more than doubling on the previous year, albeit from a low base. These methods will be the ‘ones to watch’ in the future, and retailers are investing heavily to make sure their customers have choice and convenience in ways to pay, whether in-store, at home or on the move.
“Against a backdrop of greater retail efficiency and innovation, the one jarring note is that charges remain disproportionately high. They continue to rise even though credit card use has fallen. It beggars belief that retailers incur average charges of 38p per credit and charge card transaction, 25 times more than for cash.
"Retailers have been arguing this in court for more than a decade now, and a resolution to the case is long overdue. The right conclusion would reduce these excessive costs for retailers and support their ability to invest and innovate."
British Retail Consortium
Textiles | On 27th May 2018
To curb illegal imports, Ghanaian authorities will put a tax stamp on ...
Apparel/Garments | On 27th May 2018
Partners Group, a private markets investment manager, and Kedaara...
DLF Emporio and DLF Promenade
‘Each event and promotion is planned out keeping in mind the business of...
Vidhyaa Shankar. S
A Ganapathi Chettiar
'The usage of knits is getting into the boundaries of woven fabrics'
'Natural fibres are appreciated for traditional authenticity'
Sushila International, a well established textile organisation established ...
Describing itself as the best body shape and garment fit company in the...
<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...
Nature Works LLC
Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...
Voith Paper GmbH & Co. KG
The glass mat industry is growing by five to eight per cent annually. Kai...
Biovation II LLC
Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...
Somaiya Kala Vidya
Among the many honours showered on Frater, including Fulbright and Ford...
She has carved a niche for herself as the national brand of Turkey. Her...
Bridal couture created with rich Indian heritage, exquisite craftsmanship...