Cards overtake cash as Brits get more comfortable swiping

The Bank of England might be in the middle of upgrading our cash from paper to plastic, but it appears consumers are well ahead of the curve, with new data suggesting Britons are using cards more than the folding stuff for the first time ever.

According to the annual Payments Survey from the British Retail Consortium, cards accounted for more than 50% of all retail transactions by volume in the last year.

The survey said that was partly driven by UK customers increasingly using cards for lower value payments, rather than digging for shrapnel.

“Cards have become the dominant payment method as retailers’ investment in payment technology has facilitated greater customer choice over how they pay for their goods both in store and online,” a statement from the consortium explained.

The survey also suggested new regulations helped deliver savings for retailers, with investment in payments boosted by savings of around £500m for retail businesses and their customers from the EU Interchange Fee Regulation.

That regulation was introduced following a campaign by the BRC, and caps some of the fees for handling credit and debit card transactions.

The burden on businesses was still said to be high, however, with the BRC saying that despite the savings from the IFR, retailers still spent more than £1bn last year to accept payments from customers, and the cost of processing cards remains high, particularly for credit cards.

Retail customers were also less reliant on credit, according to the survey, with retail spending on credit cards falling, represents a diminished share of retail purchases by value.

The BRC said that showed consumers borrowing less for day-to-day purchases, in contrast to wider growth in unsecured consumer lending in the UK.

“A growing number of retailers have invested in payment technology to accept cards, contactless payments and new payment applications both online and in store,” said the BRC’s policy advisor on payments and consumer credit Andrew Cregan.

“In part, this has been facilitated by the Interchange Fee Regulation, 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.”