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Got Brass in Pocket? Brits Turning Away from Plastic

April 24th, 2008 @ 6:23 pm

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Tags: Bank, Retail Company, Debit Card, U.K., Retail, Financial Services, Lisa Everitt

Though the United States seems headed toward a cashless society, in the United Kingdom more people use cash at retail than they did six months ago, a survey finds.

Surveying 17,000 retailers, the British Retail Consortium found 60 percent of transactions were completed in cash, up from 54 percent in November. By dollar volume, debit cards lead cash in both the United States and Britain.

The BRC, which represents shop owners, has objected to card companies’ campaigns to promote the use of plastic cards, which increase merchants’ transaction costs. Currently, U.K. retailers pay 4 cents on average to process a $40 cash transaction compared to 16 cents for a debit card and 68 cents for a credit card.

BRC director general Stephen Robertson says the increase in cash spending showed that people are “trying to control their finances and (not) spend money they did not have.”

Well-publicized fraud cases have also made consumers skittish, Emily Starbuck Gerson says in the Taking Charge blog at CreditCards.com. After thieves installed skimming devices on card readers at gas stations and ATMs in the village of Letchworth, west of Cambridge, many residents returned to paying cash — obtained from flesh-and-blood bank tellers, not machines.

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Lisa Everitt

A Denver-based business writer, Lisa Everitt is a veteran of daily and weekly newspapers and trade magazines, including The Natural Foods Merchandiser, Rocky Mountain News, Inter@ctive Week, San Francisco Business Times, and the Peninsula Times Tribune. more »

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BNET Retail provides daily industry news coverage and insights for managers and executives about the key players in the consumer retail industry. In addition to detailed company profiles, we bring you critical analysis on new alliances and partnerships, new products, mergers and acquisitions, labor and cost management, investments and deal flow, and a host of other important business issues.

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