Does Your Business Take Cash?
Cashless businesses that only take contactless card payments, such as cafes and bars may be growing in number in major cities but despite their apparent convenience for their target market, they are also attracting accusations that they are discriminatory.
The BBC, for example, recently featured a story about the Crown and Anchor pub in South London which, in October, switched to fully cashless with customers only able to use debit cards, credit cards and contactless payments including Android Pay and Apple Pay.
In the case of the Crown and Anchor pub, it was reported that the decision by the parent company, London Village Inns, to make the switch to cashless was motivated by too many break-ins where the burglars were looking for cash. A positive reaction, and other cost and time-saving benefits to the change from not having to deal with (and transport) cash have meant that four of the firm's pubs are now cashless with two more set to follow in the New Year.
Just Being Realistic?
Is it just a case of being realistic and acknowledging that we now live in a digital age where cash use is naturally in decline?
Other businesses in the UK and other countries seem to think so. Back in September, The Boot pub in Freston near Ipswich, Suffolk switched to only accepting card or phone payments, and many bars and cafes in UK cities such as Manchester are reported to be cashless.
Travel in other countries such as Sweden and Australia can also be near cashless experiences as contactless and phone payments take over. Also, many of the ‘trendy’ New York eateries have switched to cashless, and no longer have cash registers.
Research & Stats
Research by Ikea, for example, showed that in its stores in Sweden, only 1.2 in every 1,000 people insisted on paying in cash, thereby leading to the decision that it was financially justifiable to offer them free food in the shop cafeteria instead.
The broader statistics certainly show a decline in the use of cash. For example, UK Finance projects that in Britain cash will be used in just one fifth of all sales by 2026, and Paymentsense has reported the removal of 4,735 cash machines in the last year.
Although there are clearly benefits for some businesses going cashless e.g. saved time, cost and hassle in dealing with cash (no cash registers and back trips), less temptation for thieves (and resulting damage to premises), more counter space (no tills), faster transactions and turnover, plus credit card companies getting a commission for handling the payments, there are some critical voices.
What if the card payment systems suffered an outage / and or technical problems prevent payments from being taken? Particularly in cities, this could cause considerable chaos.
Also, in New York, cashless businesses may soon face a ban with the introduction of legislation designed to protect the poor and prevent a “gentrification of the marketplace”. It appears that cashless businesses in New York could prove to be discriminatory and exclusionary for the impoverished, homeless, under-banked, undocumented, in a city where studies have shown that nearly 12% of citizens don’t have bank accounts.
What Does This Mean For Your Business?
There’s no doubt that cashless and particularly contactless can be very convenient, fast, and beneficial for customers, business, and bank alike, when it comes to purchases of £30 and under and hence it can favour supermarkets, shops, bars and other retail and convenience outlets.
There is also a clear decline in cash itself (and ATM numbers), and an increase in the amount of debit card and contactless payments, and the use of smartphones for payments in developed economies. We are still, however, at a point where there remains quite a lot of cash in use, and where poorer and more disadvantaged and challenged members of society, of which there are many, need to use cash and may simply not have a bank account and a card with contactless / cashless payments enabled, and therefore, may find themselves being discriminated against. Some businesses and events that deal in cash may also find it challenging and costly to convert to a cashless situation.
Cashless transactions look likely to increase in the UK, and many retail businesses may soon find themselves seriously considering whether a switch to cashless could be workable and beneficial.