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Rise of ecommerce sees dwindling use of cash

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The use of cash to buy products in the UK has fallen into steep decline as online shopping becomes more commonplace.


In 2012 UK shoppers did 10%  less of their shopping with cash, according to the British Retail Consortium’s survey of 10bn payments last year – but cash is not about to become obsolete any time soon.

Cash still accounts for 54% of transactions in the UK, but its share of the number of transactions and total money spent has fallen for the first time as alternative methods, such as debit cards and PayPal, are increasingly used.

Helen Dickinson, director-general of the BRC, 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."

The BRC said that credit card use also fell by 3.4%, but debit cards rose 3.2% and alternative payment methods such as money-off coupons and PayPal more than doubled.

Dickinson said it “beggars belief” that charges on credit cards remain “disproportionately high” as credit cards decline as a method of payment.

“They continue to rise even though credit card use has fallen,” she said. “It beggars belief that retailers incur average charges of 38 pence per credit and charge card transaction – 25 times more than for cash.”

The BRC poll results were released after another survey revealed that retail sales sank at their fastest pace in more than a year over the last month.

A survey by the Confederation of British Industry showed that 23%  of retailers reported sales volumes were up on a year earlier but 33% said they were down. The negative resulting balance of -11% was the lowest since January 2012. Yet despite sales volumes remaining below average for the time of year and orders falling faster than at any point since November 2011, retailers are feeling slightly more optimistic about the outlook, according to the CBI poll.
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