Is a cashless society in everyone’s interest? Or should companies continue to offer the best of both worlds with card payments and cash both welcomed with a smile? David Wright, Suresite’s card services manager, weighs up the pros and cons.
According to the UK Card Association, payment card transactions grew to a record 1.4 billion in April 2017.
In the same month, the number of contactless purchases accounted for 30% of total payments, up from 16% the previous year. And an estimated 3.4m people now hardly use cash at all.
Does this mean cash is over? After all, when was the last time you dug around in your pocket of purse for loose change for anything beyond a Big Issue? In fact a Big Issue seller made headlines back in February when his purchase of a card reader led to the sale of an additional 200 copies a week. Even some enterprising buskers have realised the benefits of linking PayPal accounts to QR codes to deal with the decline in readily available cash.
Government figures predict that by 2026 cash payments will account for less than a quarter of all UK financial transactions. Sweden is fast becoming the world’s first cashless society, with not one high street bank in its capital handling cash any more and only a quarter of Swedes claiming to use cash even once a week.
But there are downsides to going cashless, mostly for people in need. The Institute of Fundraising found that 70% of charities had seen a fall 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 starting to emerge in Sweden that the increasingly cashless society is harmful to its older population.
However, the main arguments for businesses to go cashless are highly 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 companies can be more efficient, cutting down on back-office time and reducing security risks. You’re likely to be less of a robbery target and the hand in the till will be a concern of the past. Going cashless can also simplify business operations, streamlining accounting and inventory control, making it easier to monitor outgoings, offering greater transparency and reducing 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 working can also give your business greater flexibility, allowing you to make the most of pop-up opportunities, festival appearances and trade fairs.
Though studies show that people spend less time in store when making payments by card, card payments provide a useful source of data, allowing us to understand customers deeper and better provide them the service they want.
Cashless transactions can be processed faster, cutting queuing time and potentially increasing sales. Card payment solutions are easier and cheaper than ever before and the range of payments options available to retailers of all sizes 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 understand the payment habits of your customers. Can you afford to potentially lose a whole swathe of loyal customers who might come straight from the Post Office? Do you have many customers with no bank accounts?
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. Brits don’t accept change easily and, while millennials are more than comfortable with the idea of a cashless society, many older people still like the security that handling coins and notes brings. And while you might sleep better at night knowing you don’t have the day’s takings in a wooden box, cybersecurity is a very real threat and should not be underestimated in your journey to running a cashless company.