One of the most notable news items this week for the retail sector is that the proportion of cash transactions at the point of sale decreased 10 per cent last year.
According to the British Retail Consortium’s (BRC) Cost of Payment Collection Survey, consumers are embracing alternative ways to shop using new technology. However, paying with cash remains the most popular choice as 54.4 per cent of retail dealings are completed in this way. Along with the publishing of these results, the BRC observed that there are “fundamental changes in the UK retail industry as customers embrace new technology and new ways to shop are producing major changes in the relative importance of different payment methods.”
The report, which includes nearly 10 billion retail transactions made during 2012, indicated that cash spending by customers fell nearly 10 per cent compared with the previous year’s results, as retail transactions made on debit cards and through relatively new means such as PayPal became more popular.
Although over half of all retail transactions are still made in cash, both the number and the amount of physical transactions spent fell, by 6.7 per cent and 9.7 per cent respectively. I personally rarely pay for things with cash and despite the seduction of Usain Bolt’s adverts, I haven’t yet used Visa’s contactless payment systems as I find it easier to track my spending and budget by monitoring using online banking as well as the fact that I find the size and weight of coins extremely frustrating to cart around.
I am still relatively conservative generally, just using either credit or debit card, but the report has noted that there has been substantial growth in the use of ‘alternative’ methods of payment, which have doubled compared to 2011. In total, these non-cash, non-card payments account for £3.3 billion of sales turnover (compared to £1.5 billion in 2011) through 499 million transactions, around 5 per cent of all payments made during the year.
As Helen Dickinson, Director General of the British Retail Consortium, accurately commented: “New ways to pay and new ways to shop are shaping the retail landscape like never before.” This shift in http://www.retailgazette.co.uk/articles/42402-cash-use-drops-10-amid-new-ways-to-payconsumer behaviour is something retailers need to be fully prepared for.