Is your business considering going cashless? According to research by UK Finance, payments by cash are predicted to make up less than a quarter of all transactions in the next seven years. That’s a pretty big drop from 2006, when cash payments accounted for 62% of transactions.
The reports shows that this figure dropped to 40% in 2016 and is expected to reduce by almost half again (to 21%) by 2026. But don’t worry, people are still paying. Phew!
Contactless card payments overtake cash
The report predicts that card payments are stepping in to take the place of cash. The introduction of contactless payment functions for credit and debit cards has become particularly important.
According to statistics shared by Merchant Machine, the most popular instances of contactless payments are for public transport (91%), food and drink (53%) and books, magazines and newspapers (49%). It looks like the businesses associated with the travel station concourse are all doing well for contactless.
UK Finance’s study backed this data up by revealing that only 1 in 10 customers now pay cash at UK cafes. Additionally, payments for train tickets proved to be more than four times higher by card than cash in 2017. Contactless payments are super convenient with their ‘tap and go’ sorcery, but the research says we’re not quite ready to be a cashless society yet.
The risk of marginalising customers
UK Finance found that over 50% of those who rely on cash payments have a household income of £15,000 or less. In fact, Access to Cash Review found that 1.3 million people in the UK don’t even have a bank account.
Some businesses end up being cashless without really trying, especially those serving other businesses. But for those operating a business-to-customer enterprise, going cashless could put off a surprising chunk of customers. And putting people off might not be in the business plan.
Being cash-only can be inconvenient for customers, and they might find another supplier on their way to the cash point. Conversely, relying on digital transactions is a barrier to those who don’t have access to anything except cash, such as children.
Being cash free can be tricky for tourists.
Visit Britain predicts that the British tourism industry is expected to be worth in excess of £257 billion by 2025. That’s a nice big number. But restricting paper and coin payments could cause problems for tourists who can’t use cashless methods while travelling abroad.
Some providers implement eye-watering overseas card charges, which is why many of us buy currency before leaving the UK. There’s also the worry that the card won’t work overseas, which leaves travellers in a bit of a pickle.
Are there still advantages of going cashless?
It seems there is a reason it’s sometimes called dirty money. Are you eating at the moment? Pop your sandwich to one side. A scientific study by MasterCard showed that the average £1 is home to more germs than a toilet seat, and that the average bank note is harbouring around 26,000 bacteria. Queasy.
Other cashless considerations include security. With less cash on the business site, there is less risk of being burgled which makes things much safer.
What are your thoughts on going cashless as a business? We’d love to hear from you!