No – we don’t mean do you carry a sensible patent leather handbag fit for a head of state, we mean does it have any cash in it? Because it just so happens that cash use is falling, which means more of us could be carrying handbags and wallets empty of physical cash – just like the Queen.
According to new research by the British Retail Consortium (BRC), one of the major factors behind people abandoning their cash is how easy many retailers have made it to shop without it. Online shopping, self-service check-outs and contactless cards have all helped fuel the rise in popularity of payment by plastic, the organisation explains.
Debit cards accounted for 32% of transactions in 2013, according to the research. However, in terms of the value of transactions, these cards accounted for 50% of retail sales – an increase of 11% in five years. Meanwhile, over the same period the average value of cash transactions fell by 17%.
There are many reasons why customers may increasingly favour cards at the checkout. One of these is that it can help with budgeting by creating a record of the transaction. When you pay for a purchase using your debit or credit card, there is a record on your statement or online banking account of how much you spent and who you paid. If you use cash there is no such record, so it can be harder to keep track of your spending.
Security is another advantage of shopping on plastic. Your unique chip and pin makes it very difficult for a third party to use your card (providing you haven’t shared your digits). In addition, if you lose your card, you can easily get a replacement, and you don’t have to worry about losing all your cash too. If you lose a wad of physical cash, on the other hand, it can be very difficult to replace.
The increasing use of debit cards at the check-out, even when making a small payment, has made people less reliant on carrying physical cash. Director General of the BRC Helen Dickinson notes that it shows how shoppers are being more careful with their budgets and are keen to save money in the wake of the economic crash, even when they’re making small transactions.
And it’s not just the BRC who have found plastic appears to be taking over from cash. Research* carried out for us last year revealed that, when asked how much money they had in their wallet or purse, more than one in 20 respondents had no cash at all!
*Consumer Intelligence questioned a nationally representative sample of 2,149 UK adults aged 18+ between 11th and 14th September 2013.