CASH is still king, according to new figures from the British Retail Consortium (BRC).

They show that it is still used for 56% of all transactions and 33% of retail spending.

And the BRC’s Annual Cost of Collection survey, which covers 16,000 retailers with a turnover of £139bn, suggests that consumers prefer cash to credit as a way of helping them monitor and control their spending during the current recession.

Many retailers also prefer cash as the report shows the huge extra costs banks impose on retailers for processing card transactions.

An average cash transaction costs retailers 2p and a debit card payment costs 8p, but charges soar to 35p when a customer uses a credit card.

The BRC says it supports new payment methods like ‘contactless’ systems which are being pushed as alternatives to cash, but insists banks must reduce their charges to reflect the costs they actually incur processing these transactions.

It says if charges for every payment method were as low as for cash, more than £800m in cost savings could be passed to customers through lower shop prices.