BRC annual payments survey reveals cash use up in tough times
Paying with cash is more common than a year ago and accepting customers' payments by cash is, on average, 24 times cheaper for retailers than credit card payments.The British Retail Consortium findings make clear that, at a time when many household budgets are under severe pressure, customers are:
- Using cash more often because it helps them manage their money and prevents them spending money they haven't got;
- Shopping more often but spending less each time.
Cash was used in 5.7 per cent more transactions in 2011, accounting for 58 per cent of all transactions. But the cost of the average shopping basket fell to £10.45 in 2011 from £12.93 in 2010.
The figures are from the BRC's latest annual Cost of Payment Collection Survey which covers 2011 and includes results from around 9.4 billion transactions of all types. They add up to 59 per cent of total UK retail sales making this the largest and most comprehensive survey of its kind.
The survey also shows banks continue to levy unjustifiably high charges on retailers, and therefore customers, for handling card payments. The average cost to a retailer of having a credit or charge card payment processed was 36.2 pence while for a debit card it was 9.6 pence. But the cost of having cash transported and banked averaged just 1.5 pence, down from 1.7 pence the previous year as retailers invest to achieve greater efficiency.
The 58.3 per cent of all retail transactions made with cash (5.5 billion of the 9.4 billion covered by the survey) account for only 11.1 per cent of retailers' costs while credit and charge cards are 11.0 per cent of transactions but 51.1 per cent of costs.
Tom Ironside, British Retail Consortium Director of Business and Regulation said: "Customers have less money. They're buying things only as and when they need them, shopping more often but spending less each time, and they're more likely to be paying with cash.
"In 2010 financial worries were putting people off running-up debt and they turned away from credit cards. Now times are even tougher and overall card use is down by 10.5 per cent as people have switched to cash to better manage their spending.
"But retailers are not cheerleaders for cash. Retailers sell things. Paying is a necessary final stage. It should be easy for customers to do that in the ways they want to and the cost to retailers should fairly reflect the costs banks face in processing those payments."