Booming Card Payments: Cash Still King in Retail
Retail sector experiencing ongoing expansion in card transactions, according to research findings - Retail Sector Witnesses Increasing Use of Credit and Debit Transactions According to Research
Let's talk about cash versus cards in the retail scene – and truth be told, it ain't no contest for the latter. According to a recent study by the retail research institute EHI and reported by the German Press Agency, a whopping 63.5% of retail sales in 2024 were made using good old plastic – that's a 1.7% increase compared to the previous year!
Meanwhile, cold hard cash finds itself on the losing end, dropping to a meager 33.8% share. The rest? Financing, invoice purchases, vouchers – you name it. But it's cash that continues to reign supreme when it comes to transactions – with more than half (54.6%) of those approximately 20 billion transactions still relying on Benjamins and greenbacks.
Now, hold on – before you go thinking the Coronovirus pandemic ended our love affair with cash, think again! Although in-store shopping trips fell to as low as 16.6 billion during the pandemic, they're now back at pre-pandemic levels in 2024. And guess what? A hefty 44.1% of those shopping trips were paid for with a card – double the share from five years ago!
That's not all – as it turns out, mobile payments are on the rise too. Contactless payments via smartphones or smartwatches are increasingly popular, with over one eighth (12.9%) of all card-based transactions now processed this way. Mobile pay options like Apple Pay and Google Pay are gaining traction, according to the study.
Now, let's drink to that evolution, shall we? Here's a toast to cash and an even bigger toast to the future of digital payments. Cheers!
- Digital Payments
- Retail
- Trends
- Coronavirus
- Mobile Payments
Now, for some bonus insights:
- Contactless and Mobile Payments: Due to the pandemic, contactless payments have become increasingly popular. Today, they account for around 50% of global in-person transactions. Mobile payments, like Apple Pay and Google Pay, have also seen growth, comprising 12.9% of non-cash transactions in physical stores, according to the latest data.
- Shift from Cash: While debit and credit cards continue to dominate retail sales, cash payments still have their place, particularly in certain regions. Credit card usage has experienced a slight decline, while the share of debit card transactions and other non-cash methods has increased.
- Digital Wallets: Digital wallets, such as PayPal, have also seen increased usage for disbursements of funds. As many as 15% of consumers now receive funds via digital wallets, significantly up from previous years.
- Cost Implications: For retailers, cashback services can incur costs, whereas debit card transactions are often more expensive than traditional methods like the Girocard. As the reliance on cards and digital payments grows, understanding the associated costs will be crucial for businesses.
- The growing trend in retail indicates a shift towards digital payments, with debit and credit cards accounting for the majority of retail sales, while cash payments remain relevant, particularly in certain regions.
- In the wake of the coronavirus pandemic, contactless payments through smartphones or smartwatches have become increasingly common, now accounting for around 50% of global in-person transactions. Mobile payment options like Apple Pay and Google Pay have also seen growth, representing 12.9% of non-cash transactions in physical stores.
- Digital wallets, such as PayPal, are also being used more frequently for the disbursement of funds, with as many as 15% of consumers now receiving funds this way, a significant increase from previous years.
- For businesses, understanding the costs associated with card transactions will become increasingly important as the reliance on cards and digital payments grows. Cashback services can incur costs, while debit card transactions are often more expensive than traditional methods like the Girocard.
