Card payments overtake cash in the UK
Financial analysts say 2016 was the first year card payments overtook cash in British history.
Card payments have overtaken cash in the United Kingdom for the very first time, it has been revealed.
In 2016, the British Retail Consortium (BRC) said that more than half of all payments made in the UK were done by card.
Financial analysts have said that this is the first time card payments have overtaken cash in British history, mainly due to the fact that cards are now being used for small payment amounts, according to Business Insider.
The increase in retailer investment in payment technology has also led to the consumer switch to card payments, along with the introduction of lower transaction and handling fees which has helped save both customers and retailers roughly £500 million.
Despite the savings, it’s estimated that retailers were out of pocket by more than £1 billion in 2016 thanks to card payment fees and charges. However, as the fees continue to fall this figure is set to decline in the coming years.
“A growing number of retailers have invested in payment technology to accept cards, contactless payments and new payment applications both online and in store,” Andrew Cregan, a BRC policy advisor, told Business Insider.
Experts also state that the British government should act fast to protect the EU Interchange Fee Regulation (IFR), which saw lower handling fees and charges implemented across the board in Europe, before Brexit takes hold.
What’s more, the BRC survey highlighted how consumers are moving away from credit cards to use debit card transactions instead to save on fees. Debit cards are now used in almost 43% of all retail transactions.
According to official figures, cash transactions have dropped by more than 10% over the past two years, and 33% of card transactions are now contactless.
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