UK RETAILERS have voiced concerns over predictions of a potential cashless society, claiming it could be “another hurdle” which shopkeepers would have to overcome in order to maintain profits.
According to statistics by Access to Cash, cash use has halved in the past 10 years. Customers are said to only hand over notes and coins in only one of every three transactions.
However, the analysis warned millions of people, including the homeless and those living in rural communities, could suffer if cash was shunned in favour of card.
Anish Parekh is the owner of Londis in Ashton Under Lyne. Having taken over the family business five years ago, he told Asian Trader that going cashless could prove “difficult” for smaller businesses.
Going cashless would mean more use of card machines, he said, which can charge businesses small fees for each payment.
“Relatively speaking, it is a low cost per transaction,” Parekh explained, “but at the same time, it does cut into your margins, particularly when it is smaller transactions.”
He added: “Having this stacked up against [small businesses] could make it quite difficult,” he said. “I know it is the nature of cultural spending in our country, but it is still another hurdle we would have to overcome.”
Another retailer, Jai Singh from Go Local Extra in Sheffield, noted an additional implication in that card transactions take time to arrive in a bank account. Thus, some businesses may have to wait several days before they are able to access money.
“All the transactions that take place over weekends in our business don’t hit our bank account until midweek,” Singh told Asian Trader. “Come Monday morning, if you’ve had a busy weekend and the majority of payment has been by card, owners will be waiting for that cash to come back before they can spend it.”
Although he is sceptical about the UK becoming a cashless society, Singh admitted many of his customers use card to save time.
“They don’t have to fish around looking for notes and coins,” he explained. “Whatever the amount is, they tap the card and the payment has been made.”
Last June, banking trade body UK Finance released findings which showed a total of 13.2 billion debit card payments in 2017. This was a rise of 14 per cent on the previous year.
An estimated 3.4 million people hardly used cash at all during the year.
Gurcharan Harrad, owner of Village News in Birmingham, said: “Cash is going out of fashion. But you need cash on the spot for cash and carries as some don’t accept cards.
“Last year when the network was down at Visa, people couldn’t use their cards. I tell customers it is always best to have cash.
“The card machine network is on wi-fi, if it’s down you could potentially lose out on a sale.
“I would prefer cash. Elderly customers prefer cash as with contactless cards they’re not used to it and there is a risk of fraud.
“With Apple Pay you can pay any amount on your card by just swiping.
“Most shops have minimum limit on debit cards say £3 but we can’t impose limits as you lose the customer. It’s a bit of a Catch 22 situation.”
However, some believe the use of a card-only system could be beneficial in deterring thieves.
A shopkeeper in the Midlands, who wished to remain anonymous, said he prefers card payments as there is less cash in his store in case of robberies.
He estimated more than 50 per cent of his customers use debit or credit cards.
Further research by the Access to Cash review found that over the last 10 years, cash payments have dropped from 63 per cent of all payments to 34 per cent with the figure projected to fall to 16 per cent by 2027. And an estimated 2.2 million people only use cash and coins.
James Lowman, the chief executive of the Association of Convenience Stores, claimed cash was still an “integral” part of society.
He added: “Banks have abandoned high streets leaving it up to businesses like convenience stores to continue providing access to cash, but the high cost of business rates is making it harder to make a business case for hosting an ATM.”
In response to the report, Mike Cherry, national chairman of the Federation of Small Businesses, said: “For some small firms, the cashless model works.
“For many, though, cash is the number one payment method for their customers: going cashless would mean losing business.
“The decision to go cashless should be a proactive one for small business owners – it shouldn’t come about as the result of unreasonable banking fees.