By Julian Goldsmith, 21 April 2008 11:01
NEWS
The economic downturn is prompting a comeback for cash, as shoppers avoid the temptation of spending money they haven't actually got by paying by credit or debit cards.
According to the British Retail Consortium (BRC), UK Shoppers are paying with cash in 60 per cent of all transactions, up from 54 per cent last year. In terms of value, cash is used for 34 per cent of retail purchases, up from 32 per cent a year ago.
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The survey used a sample of 17,000 shops across all formats, with collective sales of £131bn a year.
In a statement, BRC director general Stephen Robertson said: "Reports of the death of cash are premature. 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."
According to the BRC, the resurgence of cash will delight retailers, who feel they are being unfairly charged for processing card payments.
The consortium puts the cost to retailers of processing a credit card transaction at up to 17 times higher than the charge for handling a cash payment and accuses card companies of pushing cashless payments as a way of boosting their own revenue. This cost will inevitably be passed on to the customer.
Robertson added: "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."
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