Consumers in Europe are getting away from cash transactions, and the UK is no exception. However, as the following Internet Retailing article reports, this comes at a greater expense for merchants.
“More than 75% of UK retail transactions now involve cards as shoppers move away from cash for lower-value purchases, according to the latest analysis from the British Retail Consortium (BRC).
Just 22% of transactions now involve cash, says the BRC in its 2018 Payments Survey. The change in spending methods came at a cost to the industry of around £1bn a year, says the BRC, as card scheme costs rose by an average of 39% in 2017. Retailers spent an extra £170m on processing card payments over the year largely, says the BRC, thanks to card scheme fees that rose between 30% and 100% for some transactions.
The BRC Payments Survey questioned 48% of the retail industry and looked at the payment methods that UK shoppers use when they buy goods in store and online, how this has changed since last year and how much it costs retailers on average to handle each method of payment.”
Much discussion has been given to the pros and cons of cashless societies, and the debate will continue for a while. The rest of the world outside the U.S. has been gravitating to cashless payment transactions, sometimes through government or regulatory policies. Smaller merchants that handle low priced items are most impacted. They have to consider whether cash handling costs outweigh payment transaction fees. Consumers play a major role in whether merchants should go cashless. A Shake Shack eatery in New York City decided to try cashless as an experiment and soon found that diners were staying away. In contrast, U.S. transit systems have had the most success converting to cashless in the U.S. While the jury may be still out, don’t count on seeing many U.S. merchants going cashless.