This being a Twitter poll, we get nothing on respondents’ age groups, where they live etc, but it’s nevertheless an interesting snapshot of shoppers’ views on the payments process.
Let us know your thoughts and checkout preferences in the comments section at the end of this article.
“Stop card schemes from abusing their dominant market position”
The British Retail Consortium (BRC) recently published its latest annual Payments Survey.
This reveals that in 2021, as stores closed for lockdowns and the public was advised to use contactless payments, cash usage fell to just 15% of all transactions (down from 30% in 2020), while 82% were made on credit or debit cards (up from 67% in 2020).
More than four in five card transactions were made using debit cards, with the rest made up of credit and charge cards.
As a proportion of total money spent, cash accounted for just 8% of consumer spend (down from 15%), while credit cards rose slightly to 23%, and debit cards rose significantly to 67% (up from 59% in 2020).
The rise in the use of card payments partly reflects the increase in online shopping in 2021, when 48.6% of non-food items were purchased online.
This figure has fallen to 39.9% in the first 11 months of 2022, as more people returned to the high street as the pandemic eased. As a result, it remains to be seen whether this shift to card payments will stick.
Cash remains vital for many people, particularly vulnerable groups who do not have access to other payment methods.
However, the decline in notes and coins has made it harder for many firms to use cash efficiently – increasing the costs associated with handling physical money.
Government will need to look at solutions to ensure it remains a viable payment option for consumers, the BRC argues.
While card usage soared, so did the costs associated with accepting these payments. Retailers incurred costs of £1.3 billion just to accept card payments from customers in 2021.
Debit cards, which accounted for the majority of transactions, saw scheme fees rise by 28% compared to 2020, and total merchant service charges increased by 12%. This translated into an additional £141 million in costs imposed by card firms onto retailers just to process debit card transactions.
Amidst a backdrop of mounting costs from rising energy prices, rising commodity prices, rising transport costs, a tight labor market, and other supply chain disruption, these card fees add further cost pressures to retailers.
Hannah Regan, Payments Policy Advisor, British Retail Consortium, says: “With the public in and out of lockdown and cash usage discouraged last year, over 90% of retail spending used debit or credit card.”
“With card usage soaring, already hard pressed retailers had to pay huge sums to accept these payments. We need urgent intervention from the Payments Systems Regulator and the Treasury to stop card schemes from abusing their dominant market position.”