Cash crashes to just 15% of all retail spending – cards took over during Covid

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The Covid crisis accelerated the shift towards card use, with notes and coins making up slightly more of the transactions in 2019 at 20 percent.

But around 2.4 million people aged 65 and over-rely on cash to a “great extent” in their day-to-day life.

Card firms are abusing their dominant market position

Andrew Cregan

Other vulnerable adults — including those who are homeless — also use physical money.

Many shoppers stopped using cash at the start of the pandemic over fears they were more likely to catch coronavirus while exchanging notes and coins.

Some shops avoided accepting cash from customers over similar concerns. But Bank of England research found the risk was low.

Debit or credit cards accounted for more than four in five pounds spent last year, the British Retail Consortium’s (BRC) payment survey shows. This is despite retailers incurring costs of more than £1billion to accept digital payments last year.

Andrew Cregan, payments policy advisor at the BRC, said: “The pandemic has accelerated the trend towards card payments.

“Basket sizes also rose, as customers made bigger, but fewer purchases. While cash use has declined, it remains vital for many who do not have access to other payment methods.”

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Mr Cregan also called on ministers to challenge card companies’ punitive costs on retailers.

He said: “Despite the movement to card payments, retailers are being punished through the soaring cost of accepting such payments. Parliament needs to urgently intervene in this anticompetitive 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 total number of transactions fell by 13 percent from £19.1billion in 2019 to £16.7billion in 2020 but consumers spent 20 percent more on average on each purchase.

The average shopping outing rose from £20.16 in 2019 to £24.15 in 2020.

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