High interest rates push UK shoppers from credit to debit cards: BRC

BRC has published its annual BRC Payments Survey, showing the changing way in which people made payments in 2024.

As the cost of living crisis eased, some customers returned to old habits. The weekly shop showed signs of a comeback with consumers making fewer but larger transactions. The total number of transactions fell from 20.9 billion to 20.4 billion while the average transaction value rose across all payment types.

While cash usage declined it still remains an important payment method for many customers, accounting for almost a fifth (19.2 per cent) of all transactions, though the average transaction value was significantly smaller than other payment methods. Despite their declining popularity, for larger transactions, consumers preferred using credit cards which offer additional protections for shoppers, as per the survey.

More shoppers were exploring less traditional payment methods than ever before, particularly for larger transactions. This included the use of gift vouchers, PayPal and Buy Now Pay Later.

Retailers and the BRC have long called out the significant, unjustified rise in the cost of processing card payments. Total card fees fell slightly in 2024 compared with 2023. However, at £1.48 billion (~$1.98 billion), the fees paid by retailers have more than doubled since 2019. In April, the Payments System Regulator proposed increasing transparency on fees charged to merchants and acquirers. This falls well short of what is needed.

ALCHEMPro News Desk (RR)