For the first time, UK retailers recorded credit card transactions surpassing payments made in cash.
Notes and coins have been downgraded to the third most popular method of payment in the UK.
The data, published from the British Retail Consortium (BRC), arrives amid warnings that millions of citizens would struggle to maintain a lifestyle in a cashless economy. The BRC’s members account for £180 billion of all sales in Britain.
As per the BRC’s most recent survey, debt card transactions remained the most popular, surpassing cash as the number one method of payment in 2018. In total, plastic card payments are responsible for nearly 80% of retail sales in the UK.
“For the first time, credit card spending has outstripped cash spending,” said the BRC.
Total retail sales in Britain were up by 4% to £318 billion last year, with transactions made using debit cards account for almost 57%. On the other hand, credit and charge cards payments comprised 21.5% of the total, a figure which has remained unchanged over recent years.
The cash segment of total sales dropped to 20.4%, just over £77 billion, down from 22% in 2017 and almost 28% in 2013.
However, despite the research, the BRC said that cash still remains key to the retail industry, especially for consumers exposed to certain vulnerabilities.
Last year, retailers donated £1.3 billion to third parties to accept payments from clients, an increase from £70 million in 2017. According to the BRC report, this was widely attributed to the fees paid by businesses to credit and debit card companies, which hiked by over 50% in 2018.
“Without action we will see businesses put under further pressure and it will be consumers who are forced to pay the price,” said a BRC spokesman, adding that with card payments on the rise, it was crucial that the government handles these costs.
The Access to Cash review said in March that over 8 million adults in Britain would face significant struggles in a cashless society. It argued that businesses and organisations offering vital services should be obliged to make sure consumers have the option to pay by cash.