BRC: Cash use dips and UK consumers swap credit for debit cards as higher interest rates hit hard
The British Retail Consortium (BRC) has published research showing the changing way in which people made payments in 2024. This year’s survey reveals a significant decline in the use of credit cards, from 14.2% of transactions to 12.6%. With higher interest rates making credit cards a more expensive way to shop, consumers turned to debit cards where usage increased from 62.0% to 64.0% of transactions.
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 19.2% 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.
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.
In a press release, the BRC says: “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, 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.”
The BRC is calling for:
Meaningful reform from the PSR on card fees: A long-term price cap to meaningfully lower scheme and processing fees and bring lasting reform to the market.
A commercial cards market review: Given the 8% rise in commercial card fees (by turnover), we call on the PSR to initiate a market review into commercial card interchange fees to ensure the whole payment market is functioning effectively.
Open banking: It wants to see the growth of Open Banking in the UK, so that it can be a viable alternative to cards both online and at point of sale, at a fairer price to retailers.
Chris Owen, Payments Policy Advisor at the British Retail Consortium, says: “As interest rates peaked in 2024, the use of credit cards fell as customers switched to lower interest forms of payment. However, with cards still accounting for the vast majority of transactions and card fees now more than double the level they were six years ago, only a long-term cap on card fees would bring much needed relief to retailers.”
“Looking ahead, as the PSR transitions into the Financial Conduct Authority next year, it is vital that the FCA carries this work forward, delivering fairness and transparency in a market long hampered by competition issues and unjustified fee increases.”
2025 RTIH INNOVATION AWARDS
Payments were a key focus area at the 2025 RTIH Innovation Awards.
We received a record number of entries and many fantastic examples of the continued resilience and dynamism of the retail space during hugely challenging times.
For a full rundown of all of the shortlisted entries, click here.
Our 2025 hall of fame entrants were revealed during a sold out event which took place at The HAC in Central London on 16th October and consisted of a drinks reception, three course meal, and awards ceremony presided over by award winning comedian, actress and writer Tiff Stevenson.
In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “This is the awards’ fifth year as a physical event. We started off with just 30 people at the South Place Hotel not far from here, then moved to London Bridge Hotel, then The Barbican, and last year RIBA’s HQ in the West End.”
“But I’m conscious of the fact that, to quote the legend that is Taylor Swift, You’re only as hot as your last hit, baby. So, this year we’ve moved to our biggest venue yet, and also pulled in our largest number of entries to date and broken attendance records.”
He added: “This year’s submissions have without doubt been our best yet. To quote one of the judges: The examples of innovative developments across both traditional and digital retail spaces were truly remarkable.”
Congratulations to our winners, and a big thank you to our sponsors, judging panel, the legend that is Tiff Stevenson, and all those who attended our 2025 gathering.
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