Credit card retail payments outstrip cash for first time

The number of retail transactions exceeded 20 billion for the first time in 2018 compared with 19.8 billion the previous year, as overall UK retail sales rose 4.1% to £381bn.

The value of credit card payments hit £81.9bn in the year, comprising 21.5% of the total spend. Debit cards accounted for £216.4bn in transactions – 56.8% of overall retail spend.

The number of transactions made in cash continued to decline, down from more than half of all transactions in 2013 to 38.3% in 2018. The value of cash transactions was £77.7bn during the year, accounting for 20.4% of total retail spend.

The prevalence of debit and credit card payments has hit retailers’ bottom lines. Fees associated with card payments hit £1.3bn in 2018, an increase of £70m year on year.

BRC policy adviser for payments and consumer credit, Andrew Cregan, said: “With card payments accounting for almost 80% of retail sales, it is vital that the Government takes action to tackle the soaring costs that card companies charge retailers.

“Without action we will see businesses put under further pressure and it will be consumers who are forced to pay the price.”