Plastic accounted for nearly 80% of retail sales, report shows

Credit card spending overtook cash payments in 2018 in terms of the value of sales made, according to the British Retail Consortium (BRC).

The popularity of plastic pushed cash into third place, with debit cards remaining the most popular payment method, the BRC’s payments survey said.

Last year, debit cards accounted for 56.8% of sales by value, while credit and charge cards accounted for 21.5% and cash made up 20.4% of the total.

It meant that plastic accounted for nearly 80% of retail sales by value last year.

Cash was used to pay for £77.7 billion worth of goods in 2018, compared with £80.6bn in 2017, when it accounted for 22% of sales value, and credit and charge cards made up 20.8%.

But in terms of the volume of payments made, cash remained the second most popular payment method, with coins and notes still commonly used for smaller transactions.

Last year, 9.3 billion transactions were made by debit card, 7.7bn were in cash and 2.6 billion were made using credit and charge cards.

The average value of a cash payment last year was £10.21, slightly down on £10.78 in 2017.

The BRC said the average value of a payment made in cash had remained around £10 for several years.

The average transaction made by credit card was £31.71.

The BRC also said total UK retail sales increased by 4.1% to £381bn in 2018, from £366bn the previous year. There were 20.1bn transactions in a single year – or more than 55 million per day – up from 19.8bn in 2017.

Card costs continued to rise, the BRC said, as retailers spent £1.3bn with third parties just to accept payments from customers, up £70m from 2017.

Each transaction costs retailers an average of 5.85p.

The BRC is calling for action to improve regulation of card payment fees.

It also said Brexit could see retailers paying “significantly more” to accept foreign-issued cards.