Transactions made with debit cards have overtaken cash for the first time, making it the number one form of payment in the UK.
The British Retail Consortium’s (BRC) annual Payments Survey, released today, also reveals that overall card payments accounted for more than 50 per cent of all retail transactions by volume.
The survey also reveals that falling average transaction values of card payments – from £18.63 in 2015 to £18.42 last year – show that cards are increasingly displacing cash for lower-value payments.
The news comes less than a month after Barclaycard’s Contactless Spending Index revealed that card payments rose by more than a third in the last year, becoming the UK’s favorite way to pay for goods.
Barclaycard’s index also showed that 51 per cent per cent of in-store transactions of up to a contactless limit of £30 were made using “touch and go” technology.
READ MORE: 51% of card payments now contactless
The BRC found that while new regulations have helped deliver savings for retailers from the EU Interchange Fee Regulation (IFR), which caps some of the fees for handling credit and debit card transactions, retailers still spent over £1 billion last year to accept payments from customers.
The BRC said the cost of processing cards remained high, particularly for credit cards.
However, retail spending on credit cards has fallen and represents a diminished share of retail purchases by value, which means consumers are now less reliant on credit and borrowing for day-to-day purchases.
“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,” BRC payments policy advisor Andrew Cregan said.
Other statistics in the BRC’s Payments Survey include how total UK retail sales rose by 3.5 per cent year-on-year, from £339 billion in 2015 to £351 billion in 2016.
There were 19 billion retail transactions overall in 2016 compared to 18.2 billion the prior year.