Cash remains king in UK shops, but paper money is dying says British Retail Consortium

The British Retail Consortium (BRC) analysed 10 billion retail payments in 2012 – and cash accounted for about 54 per cent of all transactions, but non-cash, non-card payments rose from less than 2 per cent to 5 per cent of the total.

Debit cards also remained popular, the figures showed, but the use of cash in terms of the number of transactions and money spent in shops was down on the previous year. This was the first time in the survey’s 13-year history that both measures recorded a fall.

Alternative means of payment, such as online payments and money-off coupons, grew, although these remained a fraction of the total.

“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,” said Helen Dickinson, director general of the BRC.

Debit cards accounted for 30 per cent of transactions, while credit cards or charge cards were used in nearly 11 per cent of cases.

The BRC repeated its concern that credit card transactions cost retailers significantly more to process than cash.

And the consultancy KPMG said that the proportion of people believing that cash will be a preferred use of payments in 2020 fell from 14 per cent last year to just eight per cent today.

“It is no longer a sweeping statement to suggest that money is about to change forever,” said KPMG’s Mark Hale.

“It might not be tomorrow, but the direction is set and it is only a matter of time and circumstance before cash is materially displaced.”

The BRC’s figures show that cash still makes up over half of all retail transactions, yet is typically used for small amounts. The average cash transaction size was down to £9.78 in 2012, from £10.45 in 2011.