In 2023, cash is slowly but surely re-emerging as the payment of choice for many, with consumers returning to the high street with physical cash in their wallets and many businesses happy to accept cash again. Consumers are now choosing to use cash over cards to help them budget during the current cost-of-living crisis. And according to data released on 23 May from the UK’s largest cash machine network, LINK, the amount of cash being withdrawn in the UK this month is now back to pre-pandemic levels – something which cash-handling specialists Volumatic predicted last year.
Some businesses, however, still seem determined to force their customers to go “cashless”, believing it to be the direction in which the UK is heading. Yet far from becoming the norm, trying to discourage customers from using cash with a view to a cashless society being around the corner is extremely short-sighted, claims Volumatic, and “going cashless” could do your business more harm than good.
“We are not against digital payments, but industry research has proven time and time again that the UK is not going cashless anytime soon, and all businesses need to be doing more to encourage cash payments, instead of showing reluctance towards them,” said Volumatic Managing Director, James Harris.
“It doesn’t make any commercial sense to exclude sections of society that are reliant on cash or those that simply choose to use cash, which is a large proportion of the UK. Far from being outdated, cash is smart, resilient and reliable time after time, and businesses that ignore this fact are making a mistake that could affect their future as more and more customers return to using cash and want to maintain the choice of how to pay for their goods.”
Volumatic has put together a list of the five “killer apps” of cash:
Protects personal data
As digital payments have become more prevalent in recent years, so too has the threat to their security. Cyber-attacks have become increasingly serious of late, with nearly 17 million users in the UK affected by data breaches during 2021 – a million more than last year (Surfshark research 2022).
To combat this threat, paying by cash offers consumers the option of making a transaction without disclosing ANY personal data. This lack of “digital trail” is becoming increasingly popular amongst many people who feel like their whole lives are lived and recorded online and offering customers the option to use cash will perhaps give them more trust in a business.
Resilience
Digital payments are great until something goes wrong. Cash on the other hand can withstand any amount of power cuts, electrical outages, cyber-attacks and wi-fi failures. There have been many instances of shops, restaurants and leisure venues suddenly losing power, being hacked or losing their internet connectivity, meaning digital payments cannot be processed, which is frustrating for all concerned, but especially for your customers.
Cash overcomes all these issues and repeatedly proves itself the most resilient method of payment we have. Outages cause takings to suffer (even an hour of being down will have a severe impact on a business) and will force customers to go elsewhere if they cannot pay with cash. Cash allows business owners to continue trading when any periods of downtime strike and will mean you are being as flexible as you can be, and your customers will certainly appreciate that.
Lower processing fees
Card issuers have always taken a cut of profits in terms of card-processing fees, but since Brexit, the once reasonable amount they charged has sky-rocketed, thanks to European legislation that capped these fees no longer being applied to the UK. A Parliament Treasury Report published last year found that card issuer fees have more than doubled since 2014. While big businesses such as Amazon are continuing to fight back against the likes of Visa and Mastercard to reduce these fees, they are showing no signs of slowing down, which could have a crippling effect on your profitability, particularly if you’re a smaller business that cannot absorb these kinds of fees as easily.
And while cash certainly incurs some processing fees, by investing in cash handling solutions (such as Volumatic’s industry-leading CounterCache intelligent solution*), businesses can quickly and effortlessly recoup costs by the savings they get by eliminating lengthy manual cash-counting and reducing shrinkage.
Helps budgeting
During any period of financial hardship, but particularly in 2023, which has seen an unprecedented rise in the cost of living not seen for generations, cash provides an easy way to help consumers and businesses keep tabs on how much they spend.
While cashless payments allow customers to spend more money than they want (or in some circumstances have) to spend, the action of physically handing over money to pay for something has been proven to actually discourage frivolous spending and acts as an important visual reminder of how much has been spent and how much money there is left to spend. This has made cash a popular budgeting tool across all age groups, but particularly amongst the younger generation, who have even managed to get “cash-stuffing” trending on TikTok.
Financial Inclusivity
While the majority of UK consumers do regularly use card and/or mobile payments, and like the convenience of them, this is not true for all areas of society. Around eight million adults in the UK (17 per cent of the population), such as those on lower incomes, those who are paid in cash, those living on benefits and those living in rural locations, both need and want to use cash as their main payment method.
Even those who don’t rely on cash still use it as a secondary or backup payment method, particularly for lesser purchases such as their morning latte or a lottery ticket. A recent study by Enryo showed that 71 per cent of people in the UK have used cash in recent weeks. With that in mind, by refusing to accept cash your business could easily lose customers.
The beauty of cash is that it is usable by every section of society, meaning everyone can contribute equally to the economy by paying for goods and services the way they want to be chosen, and that means business can benefit from not excluding those who want or have to use cash.
*The CCi counts, validates and securely stores cash, and works in conjunction with Volumatic’s latest CashView Enterprise software to give accurate reporting and accountability, meaning that any business that handles cash can make significant savings from day one and these end-to-end solutions can even help reduce CiT fees, too.
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