A fresh study from Expert Market has revealed that cash-only firms may be losing valuable business
Thanks to technology like apps and contactless payment systems, the average Brit has become accustomed to buying things quickly and effortlessly – often without any physical money passing hands. In fact, almost three-quarters of people in the UK think that by 2021 it will no longer be necessary to carry around cash. And now new research has shown how SMEs that are failing to keep up with the times are paying the price.
New research from Expert Market, the B2B marketplace, has revealed that cash-only SMEs could be missing out on £23,145 in profit every year by not accepting card payments. Having looked at business transaction figures from the period between 2015 and 2016 as well as consumer attitudes, Expert Market also found that one out of four British consumers would actively avoid cash-only companies in favour of competitors that accept card payments.
And when looking at credit card, debit card and cash payments in 2015, cash accounted for 58% of transactions compared to 42% for card payments. However, cash’s reign could be coming to a close: Expert Market has estimated that those figures may shift by 2025, when 65% of transactions could take place using a debit or credit card. The company goes on to suggest that this could mean that cash-only businesses could be jeopardising £35,680 each year.
Pointing at research from Worldpay, the payment processing company, Expert Market said millennial behaviour could be driving this shift away from cash. Worldpay has reported that 60% of 24 to 34-year-olds would prefer not to have to carry cash around with them.
So given that the next generation is even less inclined to use physical money, it certainly seems as if entrepreneurs better think twice before launching a cash-only business.