High interest rates push shoppers from credit to debit cards - BRC

• Consumers swap credit for debit cards due to higher interest rates
• Cash used for just under one fifth of transactions
• Fees paid to bank and card schemes over £1.4 billion

Today, The British Retail Consortium (BRC) has published its annual BRC Payments Survey, 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 almost a fifth (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.

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: We want 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 said:
“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.”

-ENDS-

Notes:

• BRC Payments Survey can be found here: https://brc.org.uk/media/1sellpis/brc-payments-survey-2025.pdf
• Data for the BRC Payments Survey was gathered in 2025 and covers the 2024 calendar year. Retailers participating in the survey accounted for 34% of all UK retail annual sales turnover.
• We have adjusted and improved our methodology this year. We have re-run all previous years' data so all figures used in this year's survey account for the new methodology.
• Download the BRC Payments Survey 2025:
• Definitions: