Use of credit cards fall on the British high street
June 28th, 2011
A new sense of fiscal responsibility has been seen on the UK high street as credit card use fell last year as people turned to cash and debit cards to avoid borrowing, according to the nation’s shopkeepers.
The British Retail Consortium (BRC) which represents 90% of the UK’s stores, say transactions involving credit cards dropped 12.9%.
The number of transactions involving cash also fell, although the average amount spent rose by 13% to £12.93. Debit card use jumped by 15.8%.
The BRC has criticised the level of bank charges associated with credit cards. It pointed out they are the most expensive payments they have to process.
On average in 2010, each retailer paid 1.7p per cash transaction to have the money transported and banked. However, the average charge for processing a credit card payment was 37.1p, compared with a debit card average of 9.2p. Thanks to the business incubation guys over at NewInternetIdeas.com for this information.
Credit cards were used in just 10% of all transaction, but accounted to more than 44% of processing costs.
The BRC added that cash was the quickest way to pay. Using physical money took an average of 27.2 seconds, it said, compared with an average 39.4 seconds for a card payment.
The BRC’s annual Cost of Payment Collection Survey includes results from nearly eight billion transactions in store and online, 60% of the UK’s annual retail sales.
Retailers reported fraud losses had fallen by 37% compared with 2009 after investment in technology, such as the latest secure card readers, new levels of internet security and note checkers at tills.
The figures presented by the BRC show a clear pattern. Hard-pressed customers are switching to cash and debit cards for the reassurance that they can’t spend what they haven’t got. At the same time, use of credit cards has dropped sharply. Cash remains dominant and was used for more than half of all retail payments.
What remains to be seen, and cannot be demonstrated by this data, is whether or not this pattern represents a growing maturity among the British public with regards to their spending habits or rather their restraint by default because they cannot get credit. Thanks to the guys over at ideasforabusiness.co.uk for this.
This entry was posted on Tuesday, June 28th, 2011 at 1:58 am and is filed under Personal Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.