Credit, debit, and charge card payments have overtaken cash on retail transactions for the first time in history.
The cash-free society is now one big step closer according to the latest British Retail Consortium Annual Payments Survey.
A five per cent increase in the use of card payments in retail transactions in 2016 have resulted in plastic payments accounting for 54 per cent of all retail payments.
The consortium stated: ‘Cards have become the dominant payment method as retailers? investment in payment technology has facilitated greater customer choice over how they pay for their goods both in store and online.’
Contactless payments are seen as being the catalyst for the landmark change, now accounting for a third of all retail payments by consumers.
Debit cards are now the most popular form of payment, growing by 4.5 per cent to 43 per cent of all transactions, reaching 8.1 billion. They have overtaken cash payment, which now accounts for only 42 per cent.
BRC payments and consumer credit policy adviser, Andrew Cregan, commented: ‘A growing number of retailers have invested in payment technology to accept cards, contactless payments and new payment applications both online and in store.’
Total retail sales were up by 3.5 per cent to ?351 billion in 2016, from ?339 billion in 2015. The number of transactions also rose to 19 billion from 18.2 billion the previous year, with the average sales value down slightly from ?18.63 to ?18.42 for each transaction.
Despite the widely reported growth in unsecured consumer lending in the UK, retail customers were less reliant on credit, with retail spending on credit cards falling to a lower share of the market. The BRC said that showed consumers borrowing less for day-to-day purchases
New regulations capping some of the fees charged to retailers for card payments has also helped retail companies save around ?500 million. However, the cost to retailers still remains high at around ?1 billion last year.
The data released from the British Retail Consortium is based on half of the entire retail industry.