Cash Is Out…..and Cards Are In! | Prepaid365

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9 June 2014

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Brits are increasingly turning to the use of contactless payments and self-service to pay for goods and services, according to new data.

The use of cash for these purchases it at its lowest ever level according to the British Retail Consortium, with debit cards accounting for 49.6% of sales by value.

Cash use, meanwhile, has fallen by 14% across a 5-year period to account for 27.6% of total sales.

In terms of paying, cash remains the dominant method, with 52.6% of transactions being completed in this way, ahead of both debit and credit cards, used in 32.7% and 9.3% of cases respectively.

However, cash payments have still fallen by 9.6% in five years as consumers look for more straightforward methods of payment.

The development of the digital economy

According to Helen Dickinson, the director general of the BRC, the latest trend showcases the development of the digital economy in the UK.

“It shows that customers are embracing digital shopping whether online or on the high street and retailers are adapting and evolving to meet the demand with excellent services,” she said.

Cards are also increasingly used for smaller scale purchases, thanks to the rise in online shopping and delivery services.

The average transaction involving cash fell by 17% across the last five years to £9.47, while the figure fell 12% for debit cards, to £27.58.

New payment options

“Customers are taking advantages of new ways to shop and pay,” explained Ms Dickinson.

“The availability of contactless cards, handy express stores and self-service tills, as well as online sales, has increased the use of debit cards for smaller payments in place of cash.”

Around 60% of total UK retail sales were covered in the payment survey for 2013 – totalling £191bn in-store and online payments.

Controlling small payments can be made easier with the use of a prepaid debit card as this type of card is a great way of ensuring you don’t spend more than you would like.

Unlike credit and debit cards, prepaid cards are not directly linked to a bank account, making fraudulent activity a lot more difficult.

For those with concerns over their funds, transferring some to a prepaid card can also help to control spending, as only the sums on the card can be spent.

However, the cards can be topped up if necessary and can be replaced if they are lost or stolen without funds being affected.

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