Card payments made up over 80 per cent of all payments in the UK last year as the pandemic led to an “accelerated cash decline”.
According to the British Retail Consortium’s (BRC) latest payments survey debit and credit card transactions jumped from 78 per cent of transactions in 2019 to 81 per cent in 2020, with debit cards making up over half (54 per cent) of transactions for the first time.
Cash meanwhile dropped from 20 per cent of all transactions in 2019, to just 15 per cent in 2020.
“The pandemic has accelerated the trend towards card payments, with more than four in every five pounds spent in retail now made with credit or debit cards,” BRC payments policy adviser Andrew Cregan said.
However the BRC warned that retailers were having to pay the price for the increasing use of card payments due to soaring card interchange fees.
Retailers are being “punished through the soaring cost of accepting such payments” the BRC said, adding that combined with rising Brexit related costs and supply chain issues, customers could soon end up paying more for their goods.
While customers are now paying almost entirely by card, they are also making fewer shopping trips than they did in 2019.
The BRC’s figures reveal that transaction volumes fell 13 per cent last year to 16.7 billion, but spending on those trips rose by 20 per cent on average to £24.15.
“Basket sizes also rose, as customers made bigger, but fewer purchases,” Cregan added.
“While cash use has declined in importance, it remains vital for many people who do not have access to other payment methods.”