New figures from the British Retail Consortium (BRC) suggest cautious customers are turning from credit cards to cash and debit cards to better manage their finances. The BRC also stresses that banks continue to levy unjustifiably high charges on retailers and customers for processing payments.

The proportion of transactions using credit cards fell by 12.9 per cent in a year while the proportion involving debit cards rose by 15.8 per cent. Cash was involved in a smaller proportion of transactions than a year earlier but used for a greater proportion of overall retail spending as the average amount spent in each cash transaction increased by 13 per cent to £12.93. Cash is also the quickest way to pay, taking an average 27.2 seconds compared with an average 39.4 seconds for a card payment.

The BRC's annual Cost of Payment Collection Survey includes results from nearly eight billion transactions in-store and online. They add up to 60 per cent of total UK retail sales. This year's results compare 2010 with 2009. Retailers are investing to cut the costs they can influence. Fraud losses fell by 37 per cent compared with 2009 as they invested in technology such as the latest secure card readers, new levels of internet security and note checkers at tills. But they continue to struggle when it comes to th charges they have to pay to banks. Those taking part in the survey paid out a total of £659 million in fees for payment processing and cash collection. On average in 2010, each retailer paid 1.7 pence per cash transaction to have the money transported and banked. Despite the efficiency of electronic systems, the average charge for processing a credit card payment was 37.1 pence compared with a debit card average of 9.2 pence.

"In the face of big pressures on household budgets, people are managing their money carefully while retailers are minimising the costs they can influence by investing in anti-fraud technology," says BRC director general, Stephen Robertson. "But unjustifiably high payment charges are still being taken from retailers. The question is should this money be going into increasing banks' profits or to keeping shop prices down for customers? Reducing the charges banks impose so they genuinely reflect the actual costs involved in processing these transactions is the right answer."

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