Cash-Only Can Lose Trade
Small businesses have less than five months to switch from taking cash only to accepting cards before consumers start to shop elsewhere.
Research by Paymentsense reveals that UK shoppers would continue to visit an SME, small retailer, independent coffee shop or food outlet for an average of 4.6 months before becoming impatient with their cash-only status.
Not accepting card payments is an instant turn off for some UK consumers. Over half (53%) of respondents would leave a small business immediately if card payments are not available, with 30% reporting they would be less likely to return in future.
Many small and micro businesses such as artists, craftspeople and artisan food producers only deal in cash, believing their business is not big enough to support card payments.
The research findings follow recent warnings from the industry that the UK’s cash payments system could collapse in the next two years, according to the latest Access to Cash review which is urging the government and regulators to step in to ensure cash remains viable.
The survey also found that consumer patience levels vary regionally. Small businesses in Norwich benefit from the most forgiving population; with shoppers willing to wait an average of 6.5 months after their first visit to a business before expecting card payments to be introduced, closely followed by Cardiff (6 months).
The most impatient city is Birmingham, where consumers expect to have a cashless option within just 3.5 months; while shoppers in Manchester are only prepared to wait a few days longer (3.6 months).
Older shoppers are more impatient. Millennials (25-34 yrs) were the most forgiving, willing to wait 5.1 months on average. Those over 65 were the least, only considering waiting 3.9 months.
Wealthier consumers with a household income of over £100,000 were willing to wait over half a year for card payment options (6.1 months). Those from households with an income of 25-50k were only willing to wait an average of 4.3 months.
Guy Moreve, CMO of Paymentsense, said: “Cash usage in the UK is shrinking at a rapid rate and consumers are now living totally cashless lives. Although it’s important to recognise there’s still a place for cash, it’s difficult to ignore the signals that we’re moving towards the complete digitalisation of money. Our research provides a snapshot of consumer attitudes towards cash-only businesses, but the general trend suggests these expectations are evolving as we get closer to becoming a cashless society.
Consumers are already looking ahead towards improved payment systems in the UK, from fingerprint scanning and microchips to voice ID and biometrics.
“This has serious implications for small business owners and startups during the critical first few months of trading. Our research suggests there’s a definite time limit for new businesses to upgrade from cash-only transactions, after which customers may turn to competitors offering more convenient alternatives. Giving consumers the shopping experience they expect is becoming increasingly important to influencing reputation and even trading longevity.”
Learn more at: https://www.paymentsense.com/uk
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Posted on 15 May 2019 by MinE Team