Is your business going cashless in 2019?

With cash payments falling in the UK for the past decade. While there are some benefits in only accepting cashless payments, is going completely cashless a step too far?

Debit cards have become the most frequently used payment method in the UK, overtaking cash. How often do you still use cash to pay for a railway ticket, or in shops, restaurants and pubs? With even traditionally cash-based areas such as churches, schools and even big issue sellers all going card-based.

So how close are we to becoming a cashless society? It is true that some other countries have gone further towards getting rid of cash: it now features in only 15 per cent of point of sale transactions in Norway and Sweden, and 23 per cent in Denmark.

But the UK figure of 34 per cent is much closer to those countries than it is to both France (68 per cent) and Germany (80 per cent).

What would be the impact on small businesses?

It would save time and effort spent managing cash and remove security risks associated with keeping cash on business premises or moving it to the bank. The fact that banks continue to close local branches is another reason some small businesses would welcome the change: for many, the bank is now a long drive away. 

There would be downsides there is a risk in becoming over-reliant on fallible technology, and many retailers feel that abandoning cash altogether might mean they are sometimes unable to take payments or will lose customers who prefer to pay in cash. Some businesses in rural areas face difficulties accessing reliable fast broadband services. While some consumers prefer using cards or mobile payment apps, people on lower incomes tend to use the cash more often, partly to control spending and partly because they may not have unrestricted access to the card and/or digital financial services.

Concerns have also been raised about some people with disabilities, who find it hard to use a PIN. 

However, a sizeable number of customers, particularly those in older age groups, still like cash. With a small business, you have to make things easy for people, because every penny counts. You’ve got to be careful not to alienate people. If the UK really is on its way to becoming almost cash-free, every business owner needs to consider how it might affect them and their customers. But those who are keenest to dump cash might be wise to remember that it’s a good idea to offer flexibility in terms of how customers contact you and pay for your goods or services online. While removing the choice of using cash might feel like progress, it could be a backward step. 

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