In a trend paralleled in nearly every developed nation in the world, the usage of cash is declining in the United Kingdom. The British Retail Consortium announced that usage of coins and notes in commercial transactions went down by 10% in 2012 (see the Daily Mail article). As reported by the Daily Mail, the BRC's survey examined the way Britons pay for their purchases, be it with cash, debit or credit card, or "alternative payments" such as PayPal and via mobile device.
The survey revealed some interesting results. While the level of cash declined, it is still used in 54% of transactions. However, cash accounts for only 29% of the total value of transactions. The conclusion is that cash is still widely prefered for smaller everyday purchases.
If not using cash, Britons are using their debit cards, which make up 30% of transactions but amount to 48% of transaction value. Credit card usage is about a third of debit card usage. Three percent of transaction activity switched from credit to debit cards in 2012. The BRC cites personal financial discipline as one reason why debit cards are preferred over other payment methods. Also, the BRC notes the high fees that banks levy on retailers for card-based payments, 25 times the fee levied for cash transactions!
Alternative payments remained statistically nonexistant until 2010, and are now used in 5% of all transactions, netting less than 2% by value. Mobile payment methods will be a high-growth area for retail over the next few years, although they are a long way off from rivaling card payments. With the high bank fees charged for credit and debit card transactions, it is obvious why retailers strongly prefer alternative payment methods and are encouraging their adoption by the shopping public.
Cash usage has declined worldwide over the last decade. The handwritten bank cheque has all but gone extinct for at-the-register purchases. Nations like Sweden use even less cash than most, while Hong Kong has largely been cashless for many years. Still, cash remains a significant part of transaction payments worldwide. While cash usage may never go away entirely, the proportion of economic traffic undertaken in cash will continue to decline. Like the paperless office, the cashless society is still a long time away.