According to the UK Card Association, the number of card purchases rose to a record 1.4 billion transactions in April 2017. This increase is down to the migration of cash payments to cards, as well as the increased use and acceptance of contactless.
In April 2017 the number of contactless payments accounted for 30% of total purchases, up from 16% a year previously. An estimated 3.4 million people now hardly use cash at all.
Does this mean cash is dead? After all, when was the last time you had to dig around in your pocket for loose change for anything beyond a Big Issue? In fact, a Big Issue seller hit the headlines back in February for buying a card reader to deal with customer behaviour, selling an additional 200 copies in the process. Even buskers (albeit in major cities) are realising the benefits of linking PayPal accounts to QR codes to deal with competitive pitch pricing and a decrease in readily available cash/queues at the cashpoint.
Government figures predict that by 2026 cash payments will account for just 21% of all financial transactions. Sweden is fast becoming the world’s first cashless society, with none of Stockholm’s high street banks handling cash anymore and only a quarter of Swedish people claiming to use cash once a week.
Yes, there are downsides to going cashless, mostly for people in need. The Institute of Fundraising found that 70% of charities have seen a decrease in cash donations over the last three years. For people who don’t have a bank account, cashless donations can actually cost them money. There are also concerns in Sweden that the increasingly cashless society is harmful to its elderly population.
However, the main arguments for businesses to go cashless are persuasive. Cashless donations are now available in more than 16,000 UK churches, cathedrals and religious sites in response to churchgoers carrying less money and after a trial proved successful.
Cashless can be much more efficient, cutting on back-office time and decreasing security risks. You’re likely to be less of a robbery target and the hand in the till (at least literally) is a concern of the past. Going cashless can also simplify business operations, streamlining accounting and inventory control, making it easier to monitor fees and outgoings, providing greater transparency and reducing the chance of human error. There’s no more waiting for deposits to clear or having to add in large amounts of cash sitting in a bank somewhere.
Cashless can also enable your business greater flexibility, allowing you to make the most of pop-up opportunities, festival appearances and trade fairs.
Though studies have shown that people tend to spend less time in-store when making payments by card, these card payments are a useful source of data, allowing us to understand our customers better and provide them with the service they need. Cashless transactions can, in theory at least, be processed faster, cutting queue time and potentially increasing sales. Card payment solutions are easier and cheaper than ever before and the range of options is increasing, whether you want a simple convenience store bank card terminal or a bespoke payments service.
But if you decide to go cashless, it’s important to know your customers’ payment habits. Can you afford to potentially lose a whole swathe of loyal customers who might come straight from the Post Office? Do you have customers with no bank account and will you lose loyalty?
Though British consumers have shown that they favour the convenience that comes with paying by card, it might be some time before the UK goes completely cashless. British people don’t accept change easily and, while millennials are au fait with cashless, many older people still like coins and notes. And while you might sleep better at night knowing you don’t have the day’s takings in your kitchen, cybersecurity is a very real threat and should not be underestimated in your journey to cashless.
David Wright, Card Services Manager at card payments processor Suresite.
Suresite provides flexible, low-cost card payment solutions to independent and group retailers, as well as multinational organisations