Cash was used for less than half of all retail transactions across the UK in 2015 according to the BRC's recent annual Payments Survey which covers nearly 50% of spend in the UK. The report looks at the methods of payment UK shoppers are using when buying goods in store and online, how this differs from previous years and the average cost to the retailer for handling each method of payment.

Cash usage

The use of cash has fallen almost five percentage points to 47.15 percent of all retail transactions in 2015 from 52.09 percent the previous year. This is the largest percentage point drop for five years and means that some 20 percent fewer transactions are made with cash than in 2011 (all figures Copyright BRC):

Average transaction values - cash up and cards down:

Substantial changes in the mix of payment methods used

Cash declines as percentage of sales transactions against 2014 figures while debit cards grow fastest:

Payment card usage

In 2015:

• debit cards - now the main payment method (53% of sales turnover)
• credit & charge cards: used more but spent less (use of credit and charge cards have during 2015 increased their share of transactions but not the corresponding share of value)

Payment cost comparison - cash still cheapest

BRC’s latest analysis showed that the cost for a retailer to process a debit, credit or charge card payment has started to fall, however the differential between the cost of the payment types still exists. BRC’s cost comparison analysis for the main payment methods showed:

• cash accounts for 47.15 percent of transactions - yet only account for 10.22 percent of costs
• debit cards account 38.07 percent of transactions - and account for 34.27 percent of costs
• credit and charge cards account for only 11.14 percent of transactions - and yet they still account for a staggering 49.24 percent of costs

The study showed that the average cost/transaction is:

Overall, BRC found that “During 2015 the average cost of collection for all payment types as a percentage of tender turnover has decreased to 0.35 percent of turnover compared to 0.44 percent in 2014. During the last five years the average has decreased by over 15.65 percent (from 0.41 percent in 2011 to 0.35 percent in 2015).” They were very please to observe that their campaign to reduce card acceptance costs is starting to have results with average cost of accepting each credit or charge card transaction has reduced to 28.41 pence (2014: 33.85 pence) for each transaction - a 16.09 percent decline. BRC believe that under the new Interchange Fee Regulation (IFR) the decline in debit card charges may end for a while.

---

CTMfile take: The decline in cash usage is inevitable. The BRC report shows, yet again, that retailers should try and replace cash with contactless transactions on a debit card.