Why Cash is Still King for British Shoppers?
Monday, January 18, 2010 3:03
As people give their credit cards a beating in the January sales, it is worth noting that most transaction in the UK are still by cash, and for very small amounts.
We use cash for more than two-thirds of the payments we make, and of those a similar proportion are for less than £5. Indeed, more than one-quarter of cash payments, equating to about 100 transactions per person per year, are for less than £1.
Londoners used to free newspapers, swipe-card travel and £2-plus coffees, might wonder where all these payments take place. The answer is in the nation’s newsagents, cash accounts for about one-quarter of all consumer payments, but 98% of those are made in newsagents.
Cash is still dominant among the old, especially those who are poor, and among those too young to get their hands on plastic, and more of their transactions are for small amounts.
Even for higher value transactions, cash is still a major force, and likely to remain so, with the impending demise of cheques. For payments over £50, around 900 million are by debit card and 400 million by credit card, compared to 640 million in cash. That means just 30 or so transactions in excess of £50 per person per year, a third of which are in cash.
People in the UK settled up more than 22 billion transactions by paying in cash in 2008. Overall, the number of times cash was the payment of choice has fallen slightly during the past 10 years, but cash still accounted for spending of more than £260bn.
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