Can you remember those rectangular pieces of paper we once scribbled on and used as currency? Cheques now seem laughably archaic don’t they? Well cash is on its own way into the history books too, and it’s being handed an obliging step by the myriad of mobile payment services spreading in the UK market. Public opinion polls show that cash is no longer king, and as we edge closer to a cashless society – it’s time for small businesses to either adapt, or pave their own journey to the currency graveyard.
Public opinion poll website YouGov released figures this week, commissioned by Sage Pay, showing that 64 percent of consumers prefer cashless payments, while one in three are ready to re-shelve items once they discover only cash is accepted. This poses alarming and growing problems for small-to-medium sized businesses, which are reported to be already losing a staggering £12bn per year because they’ve not adapted any form of electronic payments. Put simply, ‘cash only’ means many consumers will just consume elsewhere.
More than a third of retailers in the UK say they don’t currently support credit or debit card payments, which, despite seeming backward – is usually a result of businesses’ reluctance to burden the cost of taxes and card transactions: roughly 20-30p for debit, and 2 per cent for credit cards. But what they fear losing through these costs, they probably already lose in customers leaving their shops, heading on their way to more modern, adapted premises. It’s 2013 after all, and it’s time for small businesses to catch up.
The advantages of cashless payments are clear for all parties: customers save time rummaging for coins, and rather than search for an ATM to draw out cash to buy a £2 coffee, they can simply scan a bank card, or use a mobile app - then rush on with their life. Businesses can save money in cash handling, gain more detailed information on their customers, reduce point-of-sale time, and provide a more efficient service. The economy is set to reap benefits too - as it’s easier for the Government to track taxes through digital receipts.
Simon Black, the CEO of Sage Pay, said: “The biggest thing small businesses will lose out on is sales because consumer behaviour is changing, and people are carrying less cash around. They like the convenience of paying with card, and in the future you won’t even need a plastic card – you’ll just pay using your card account, but via your smartphone.”
Technology is moving fast, and small businesses are starting to lag behind dramatically. They need educating on how best to adapt to new payment systems, or they will lose out to competitors – probably big corporations who have everything in place to deal with the demands of 21st Century lifestyles.
The ‘customer is always right’ proverb fits perfectly with this cashless debate. It’s time for small businesses to provide customers with the flexibility they want, or they will eventually drive themselves off the high street. We all like the idea of supporting the independent retailer – and they should requite this, and start supporting us, the customers.