Although paying with cash is still the most popular way to buy goods, use of alternative payments almost doubled in 2012. According to UK-based merchant service provider, PaymentSense, businesses without online payment facilities need to adapt quickly.
Businesses need to prepare for the future as a reduction in the use of physical cash is pushing online payments to the fore.
The popularity of alternative payment methods is increasing. Last year, the average customer did 10% less of their shopping with cash than they did in 2011 according to a recent survey. The major increases have been in online and card payments.
A spokesperson at paymentSense said: “As the public become more aware of how they need to cut back on spending, they are using the more traditional payment methods less. This is one of the main reasons the use of credit cards has dropped.
“We also see an increase in online transactions as more people become confident and comfortable with the process. All businesses should now be looking to increase their online presence; the companies already online should keep up with the latest trends by making sure they can accept card payments through their website.”
According to the study by the British Retail Consortium (BRC), more than half (54.4%) of transactions are still made with cash – but that figure is dropping. The survey covered ten billion retail payments in 2012 and also found credit card use was down 6.7%.
In the same time, debit and charge card use had risen by 3.2 and 3.4% respectively. Online transactions now account for around 5% of all purchases.
Helen Dickinson, director general of BRC, said: “New ways to pay and new ways to shop are shaping the retail landscape like never before. Changing customer preferences are driving the increase in debit card use – they’re helping people to manage their money better and are a natural fit for online shopping and self-service checkouts.”
According to the BRC total UK retail spending in 2012 was GBP311bn. Transactions covered in the survey represent almost 60% (GBP182bn) of that.
As the UK’s largest Merchant Service Provider, PaymentSense enables 30,000 SMEs to process over GBP2bn of card payments per year. From chip and PIN machines to e-commerce payment services, PaymentSense supplies small businesses with card processing solutions that allow them to take payments in store, online, over the phone and on the move.
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