If your business is considering moving to a cashless model, it might be time to think again. There has been a school of thought predicting that all payments for goods and services will become digital. Whilst that might be true for some sectors, it’s dangerous to assume the same is true for all.
So, what are the myths around cashless payments and how do they impact on the retail sector? Most importantly, what is the truth around consumer’s use of cash and how can that help your business adopt the best payment acceptance practices?
Below, we discuss four myths surrounding cash, and why retailers shouldn’t be too quick to dismiss cash payments.
Myth Number 1: People don’t pay with cash any more
This myth is perhaps the most misleading. Although it is true that during the ‘Covid years’ cash payments declined, the bounce back of cash has been much stronger than many people predicted. Currently, statistics from the Bank of England show that 5 million adults in the UK rely on cash in their daily lives and cash remains the preferred payment method for 21% of the population.
This preference for cash could be down to several factors. Indeed, many people may not have access to a bank account, but some may simply choose to pay in cash for convenience, financial or budgeting purposes. There is a growing trend, particularly among the younger generations, to consider a more cash-based approach to help them keep a tighter rein on their spending habits and help them budget more effectively. Examples of this include the #cashstuffing trend on Tik Tok.
Retailers need to carefully consider their customers’ characteristics and whether a move to card-only would alienate consumers or, more worryingly, leave some with no option to pay at all.
Myth Number 2: Risk of theft and loss is higher with cash
Okay, yes it might be true that there is a greater opportunity for internal and external theft when dealing in cash. However, this can essentially be eliminated with the use of the right systems and procedures.
At Loomis we offer a wide variety of smart safes that can count, deposit and protect cash payments from the point of transaction. All monies stored in our safes are indemnified by Loomis, meaning that the money is no longer the retailer’s risk. We also have many systems and procedures in place that can help our customers minimise any risk of internal theft.
Myth Number 3: It is expensive to accept cash payments
An assumption that is often made is that cash is more expensive to accept and process than digital payments. This isn’t really the case.
Whilst it is true that there are costs, whether internal or external, associated with transporting and depositing cash takings, the cost of cash payments are transparent with no hidden fees and are not tied to the financial giants who drive the digital payments landscape. By contrast, digital payments will always incur a transaction fee – these can differ dramatically depending on the system and the provider. Although these fees might be appear minimal for each individual transaction, they can soon mount up when there are multiple card payments each hour, day and week.
As such, retailers would be wise to evaluate the costs and fees associated with credit card payments, potential data breaches, chargebacks, and check payments.
Myth Number 4: Accepting cash is inconvenient and time consuming
Historically walking cash to the bank each day to deposit takings was the norm but this was not only a risky strategy, it was also time consuming and inconvenient. It was also an ineffective use of an employee’s time. Time that could have better been spent interacting with customers or on the shop floor.
Cash in Transit services have changed all this. Convenient collections by driver guards who are fully trained with safety equipment and armoured vehicles means that it’s easier than ever to deal in cash. Collections arranged with companies such as Loomis, can be agreed at convenient times via a handy online portal, as too can coin and float deliveries.
Services such as these are not only cost effective but also save time and drastically reduce risk to staff. This is even more true in a world where bank closures are a daily occurrence and there are fewer and fewer physical places to deposit significant cash takings.
Ultimately, cash is still king for many UK consumers and society and the UK government recognises the importance of ensuring the ability to pay by cash remains. Making any switch to a ‘card-only’ payment acceptance model should be carefully thought through – not only could it damage your turnover, but it could also damage your brand.