Cash accounted for nearly one in every five retail transactions last year, according to a trade association, as households made smaller purchases to eke out their budgets.
The British Retail Consortium (BRC) recorded a rise in the use of cash for the second year in a row, accounting for 19.9% of transactions in 2023, up from 18.8% in 2022.
Debit cards remained the most common method of payment, making up nearly two-thirds (62.0%) of transactions in 2023. Debit and credit cards combined made up over three-quarters of transactions.
Overall, customers visited shops more frequently but made smaller purchases, as the cost-of-living crisis continued to pinch in 2023, the BRC said.
The total number of transactions rose from 19.6 billion to 21.0 billion while the average amount spent per transaction fell from £22.43 to £22.03.
Persistent inflation and the cost-of-living crisis continued to affect households across the country and many consumers used cash to budget more effectively
Card fees paid by retailers continued to grow and the total amount paid by retailers to banks and card schemes rose by over 25% in 2023, bringing the total amount in card fees paid to £1.64 billion, according to the BRC’s estimates.
Chris Owen, payments policy adviser at the BRC, said: “Persistent inflation and the cost-of-living crisis continued to affect households across the country and many consumers used cash to budget more effectively.
“However, the dominance of card payments continues apace.”
Data for the BRC payments survey was gathered in 2024 and covers the 2023 calendar year. Retailers participating in the research included those with a high street and online presence and accounted for 37% of all UK retail annual sales turnover, the BRC said.
