Cash use rises for first time in a decade, says BRC

The BRC Payments Survey 2023 found that last year cash was used for 19% of all transactions, up from 15% in 2021.

It concluded that this was because many households were using cash in order to budget more carefully as the cost of living rose.

Despite the significant rise in the number of transactions for which cash was used, debit and credit cards still accounted for 85% of all spending, as cards tend to be used for larger transactions.

Overall UK retail sales rose by 4.3% to £439.5bn in 2022, although this was largely due to rising prices resulting from inflation throughout the supply chain.

Average transaction value fell from £24.49 to £22.43, as consumers shopped around more and made more regular, but smaller, purchases.

This reverses a trend seen during the pandemic, towards less frequent, bigger, shopping trips – as people tried to avoid going out as often.

The increase in cash usage – both by spend and transaction numbers – was welcomed by the BRC.

It said that its members are committed to accepting cash, supporting vulnerable groups and those using cash to budget.

The BRC added that the dominance of card payments has come at a significant cost to retailers.

Retailers spent £1.26bn on card processing fees, which includes a 27% increase in scheme fees and a 7% increase in interchange fees (as percentages of turnover) in 2022.

Hannah Regan, payments policy advisor at the BRC, said:

“We are now seeing a return to many of the pre-pandemic trends in payments, including smaller but more frequent purchases, and a slight return of cash payments.

“Unfortunately, what has not changed is the ever-increasing scale of fees paid by retailers in order to accept card payments.

“Though alternative payment methods could provide much needed competition to the market, the dominance of card payments means it is essential that action is taken to prevent fees rising further.”