Cash remains the most popuar payment method, British Retail Consortium figures confirmed this week, while credit cards remain popular for online spending and alternative payments such as PayPal are now starting to gain traction
The BRC Annual Payments Survey report found that credit and charge cards remain popular online because of the extra protection they offer. At the same time new payment approaches from contactless to alternative, non-card payments are starting to attract take-up.
The report, which questioned BRC members and retailers, found that in 2014 cash accounted for 52.09% of transactions, debit cards for 31.74%, and credit and charge cards for 9.9%. The proportion of credit and charge card sales was up from 9.28% last year, although average transaction values have fallen by 9.11% over the last five years, from £41.63 in 2010 to £37.84 in 2014.
Non-card payments, the category used to describe face-to-face payment types including contactless and methods such as used over the internet, such as PayPal, accounted for 6.27% of transactions – up from 0.06% in 2010. However those transactions were worth only 1.97% of total retail sales value, put at £185bn in 2015. The average value of each transaction came in at £5.45, up from £5.31 in 2013. That compares with the £40.81 spent on average in 2014 in credit card transactions.
The report also detected smaller and more frequent shops as buyers turned to convenience stores and average transaction values continue to fall. At the same time, 6.6% of respondents’ turnover came from online sales, worth more than £12bn in 2014.
Helen Dickinson, BRC director general, said cash remained the cheapest form of payment for retailers to process, accounting for 8.6% of all payment costs, while credit cards accounted for 45.45% despite making up only 9.9% of transactions.
She said: “Cash remains the cheapest method of payment for retailers to process and, for the moment, it remains the most frequently used method of payment too. We’re entering an exciting time for retail as technology continues to have a major impact on everything we do – this is just as true for methods of payment as it is for how products are sold.
“Meeting new demands from consumers, be it how and where they want to shop or how they wish to pay, retailers will need to innovate in order to continue to meet customer demand. Unnecessary financial burdens will only make this work harder. In order to remain a world leader in retail innovation, we all need to work together to make sure that these burdens are removed.”