- Danielle Wightman-Stone |
Britons are spending more money using debit cards than cash, according to the annual Payments Survey from the British Retail Consortium.
The survey reveals that card payments, debit and credit cards, accounted for more than 50 percent of all retail transactions by volume for the first time, driven by UK consumers increasingly using cards for lower value payments.
It adds that card usage has grown as a result of more retailers investing in payment technology to facilitate consumer choice, as debit card transactions grew in 2016 by 4.5 percent to almost 43 percent of all retail transactions, overtaking cash transactions which saw a 5 percent drop in its share of retail purchases to account for 42 percent.
The report also noted that retail customers have become less reliant on credit cards, as the survey reveals little change in the relative state of different payment types by sales value, however, retail spending on credit cards has fallen and represents a diminished share of retail purchases by value. This shows consumers borrowing less for day-to-day purchases in contrast to a broader trend of increasing consumer borrowing in the UK.
This year’s annual report also covers the first full year in which the less transaction ceiling has stood at 30 pounds, having risen from 20 pounds in late 2015. It notes that a third of all card transactions are now less, according to The UK Card Association, and that the wider use of less has gone some way to displace cash for lower value transactions that had until recently been the preserve of notes and coins.
Commenting on the report, British Retail Consortium policy advisor- payments and consumer credit, Andrew Cregan, said: "A growing number of retailers have invested in payment technology to accept cards, less payments and new payment applications both online and in store. In part, this has been facilitated by the Interchange Fee Regulation (IFR), which was introduced across the European Union following a successful campaign by the BRC and has led to a significant fall in the cost of collection that benefits retailers and their customers.
“Looking ahead, the Government should act to retain the benefits of the IFR for retailers and their customers after the UK leaves the EU and introduce further regulatory action to address the alarming increase in other card fees and charges at a time when the retail industry is facing acute cost pressures elsewhere.”