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Over 80% of retail spending now uses debit or credit card

Over 80% of retail spending now uses debit or credit card
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Debit and credit card transactions now account for more than four in every five pounds spent in 2020 (81%), a new report from the BRC has found.

According to the annual Payments Survey cash use now accounts for just 15 per cent of total spending in retail, though it still accounts for 30 per cent of individual transactions.


While card transactions went up from 78 per cent in 2019, cash use declined by 5 percentage points, from 20 per cent in 2019.

The survey has also revealed major changes in shopper behaviour, with consumers making fewer, but bigger shopping trips. While the number of transactions fell by 13 per cent (from 19.1bn in 2019 to 16.7bn in 2020), consumers spent on average 20 per cent more per transaction, leading to an increase in the average transaction value, from £20.16 in 2019 to £24.15 in 2020.

The report, however, notes that the overwhelming trend towards card payments in recent years has meant retailers incurred costs of more than £1 billion just to accept these payments from customers in 2020.

Debit cards, which accounted for over half of all transactions (54%) for the first time, have seen transaction fees rise by 22 per cent (to 7.2 pence per transaction).

The BRC warned that these additional costs can translate into higher prices for consumers in the backdrop of mounting costs from Covid, Brexit, global supply chain disruption and rising commodity prices.

“Despite the general movement to card payments, retailers are being punished through the soaring cost of accepting such payments,” Andrew Cregan, Payments Policy Advisor at the British Retail Consortium (BRC), said.

“Parliament needs to urgently intervene in this anti-competitive behaviour by regulating card scheme fees and abolishing interchange fees, both of which ultimately hurt consumers. Card firms are abusing their dominant market position, and this must come to an end.”

The BRC, along with other business groups, has recently called on the MPs to intervene and protect businesses and customers from soaring card costs, urging immediate action to tackle the “anti-competitive practices” in card payments.

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A whopping ninety-one per cent of respondents to a survey conducted by the Federation of Independent Retailers (the Fed) called for more police patrols on streets, while a similar number - 90 per cent - said that shoplifters should be handed harsher sentences.

Seven out of 10 respondents (72 per cent) said their stores had experienced shoplifting, break ins and damage to property, while they and their staff had been physically or verbally threatened.

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“Inadequate responses from the police and a slap on the wrist for offenders means that shoplifting is soaring, and offenders are becoming more aggressive and brazen,” said Fed National President Mo Razzaq.

“From the responses we received, it is clear that real action is needed by police, by courts and by the government to stem the overwhelming tide of crime against retailers and their staff. Everyone deserves to feel safe at work and for their businesses to be protected against criminals.

“Fed members are also sending a clear message that one of the catalysts for verbal and physical abuse in stores is asking for proof of age before selling an age restricted product. If the government presses ahead with its plans to phase out smoking and vaping through a progressive ban to gradually end the sale of tobacco products across the country, independent retailers will be subject to even greater levels of violence, abuse and theft.”

Calling for action from the government and not just words, Mr Razzaq continued: “Without effective deterrent, criminals and opportunistic members of the public will continue to commit crimes.”

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