[Dave Birch] According to an Alliance & Leicester Commercial Banks Cash Survey published recently, nearly half of all UK retailers (actually 42%) say that cash is their preferred payment mechanisms. Perhaps I’m not reading it right, but the survey has some other surprising results: it claims that 12% of retailers prefer cheques, presumably for big ticket items, when I cannot understand why anyone in their right mind (or at least with any familiarity with the Consumer Credit Act 2006) would use anything other than a credit card. Even more surprisingly, only one in four retailers say that they prefer debit cards, which I would have thought were much more appealing than credit cards. The survey also notes that nearly two-thirds of small- to medium-sized retail businesses think that both cheques and credit cards are too expensive. In this group an even higher proportion (49%) prefer legacy wonga.

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According to The Daily Telegraph, Boots is going to stop accepting cheques as they now account for only 2 in every 1,000 transactions. For our overseas readers, I should point out that Boots is a British institution, a high-street pharacy-cum-drugstore. I’m not sure, but I think the key statistic is that two-thirds of the UK population visit a branch of Boots every month. So when they say that cheques are history, others will surely follow (Shell petrol stations no longer take cheques either, so it’s not just Boots). That I can understand. The only people I write cheques to are the kids schools, for trips and dinner money and that sort of thing (why they can’t get a Paypal account I’ve no idea) and our gardener.

But why do retailers think that cash is cheaper? I wonder about these figures: it must cost Boots more than zero to count, bag, deposit, guard, store and transport cash. Perhaps it’s a function of size: the SME’s quoted in the Alliance & Leicester survey may regard administration and bookkeeping an unnecessary overhead when applied to cash and may perhaps sometimes skimp on the record-keeping, whereas Boots do not.

There’s another point made in the survey: nearly a third of retailers say that if customers stopped making cash payments it would have a negative effect on their business, with a surprising 49,000 fearing they would be forced to close down. Alliance & Leicester reckon that the retail sector takes in £8 billion in cash every month, calling it the “lifeblood of the industry”. Meanwhile, CAP Gemeni’s World Payments Report poses some interesting questions about SEPA, including “Since cash usage is not really decreasing in Europe, and knowing that the cost of cash is very high for society, how can public authorities and banks reduce the public’s reliance on cash?”. Hhmmm… good question. Any suggestions?


  1. Interesting what you say about cheques and schools – my experience also. The problem they have is identifying each individual payment for items that are often of the same value. The beginning of the school year/term is particularly difficult – I must have written out 10 cheques over the last few weeks. What all this costs in bank charges I hate to think.

  2. I may have been unfair on my son’s school as I’ve now discovered that I can in theory load his school lunch (magnetic stripe) card via the web using a credit or debit card. I shall give it a try next time and report back…

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