Cards are now king in the UK, but are retailers abroad ready?
This month, the British Retail Consortium revealed that for the first time in the UK, card payments
now accounted for more than half of all transactions
1. Cash payments are now the minority for the
first time, although with the declining use of cash, it really was just a matter of time.
The latest results also showed that Brits are increasingly opting to use contactless payments where they can simply tap their cards for any purchase under 30 Pounds. In fact, they now make up a third of all card purchases, up from just 10% in October 2015. Payments in the UK are becoming increasingly frictionless, meaning that Brits can append less time at the tills, and more time enjoying their days.
While this is generally seen as good news for the UK consumer, it does present a more complicated picture when it comes to use of cards abroad. Brits now see making card payments as the norm and increasingly don't want to use cash if they can help it. This therefore also extends to their summer holidays. If you don't make most of your payments in cash while at home, why would you want to do so while abroad, especially when you're using a currency with coins and notes that you might be less familiar.
Merchants around the world should therefore expect an increase in UK holidaymakers looking to pay using their cards while abroad. Card payments are usually safer and more convenient. However, many travellers unfortunately do not always know the choices that they have available when they make payments abroad.
Crucially, too many Brits are still in the dark about their currency options and whether or not they wish to opt for dynamic currency conversion (DCC). By selecting DCC, the customer is able to pay in their home currency and see the exact rate that they are being charged at the point of transaction. Alternatively, they can choose to pay in the local currency, in which case rates and additional fees are set by the bank or card provider.
The UK is increasingly moving to a cashless existence, but this presents both challenges and opportunities. It is important that we continue to educate cardholders of their payment options as they increasingly jet off with just their credit or debit cards in tow.