Cash is making a comeback as a method of payment because customers fear spending money they haven’t got, according to a new report.
New figures from the British Retail Consortium (BRC) show cash has increased its dominance as a means of payment over the last 12 months.
A survey of 17,000 shops found it’s now used for 60% of all transactions, up from 54% last year.
In value terms, cash is used for 34% of retail spending compared with 32% a year ago.
BRC Director General Stephen Robertson said: ‘Hard-up customers are increasingly reluctant to spend money they haven’t actually got in their hands.
‘While total retail spending continues to grow, there is a widening gap between the amount spent in cash and the amount spent using cards, suggesting customers want to keep tight control of their finances.’
The BRC criticised card companies for pushing cashless payment methods to boost their revenue.
It said customers did not realise retailers were charged an average of 2p for processing a cash transaction, 8p for a debit card and 34p for credit cards.
Retailers who responded to the survey were charged £516 million in 2007, of which 82% (£424 million) was for card payments.
Mr Robertson added: ‘The BRC has consistently said these unjustifiable charges cost customers because they are so high retailers are forced to pass them on.
‘As banks move to replace cash, they must acknowledge the very low costs they actually incur.
‘Banks should not be exploiting new payment systems as a way of taking extra money from shoppers. There should be a lower fixed fee per transaction which actually reflects the cost of processing, so new technology brings balanced benefits to retailers, consumers and banks.’