Physical cash and SMEs = a match not made in heaven? We uncover the trust cost of coins and notes for your business and what they could mean for your SME finances.
If you've heard the phrase, "I never carry cash on me anymore" more than a handful of times in recent years you're certainly not alone.
The ease, convenience, and security of contactless payments have underpinned a shift in payment types over the past decade. Smaller and smaller retail businesses, charities, places of worship, and even street vendors have introduced contactless payment abilities as a means to connect to a larger base of consumers and donors.
But outreach aside, why is a cash-based business more and more of an anomaly? And are there more to the 'Card Only' signs in shops?
The truth is, cash costs cash. Particularly for Small Medium Enterprises, keeping physical assets can cause serious disruption to your business's financial health and outlook. Here's how.
Consumer behaviour may be foundational to the cost of cash debate, it isn't the only influencing factor. Cash handling at registers can incur human error or security risks, counterfeit notes or other forms of loss to business assets. But it's also in the clock-watching.
Cashing up, going to the bank, and all the admin efforts around properly logging cash is time spent that you and your business could have back through digitalising your finances. In fact, according to sumup, small businesses in the UK could minimise time spent on these types of tasks from 94 minutes to 28 minutes on average.
The exchange of cash during a transaction can also be seriously time-consuming - especially if you experience particularly hectic periods of demand, like in a bar.
Of course. Cash is still a viable, legitimate form of currency and likely will be for some time to come. It requires less hardware for SMEs to protect, is accepted nearly everywhere within your own country (and sometimes out of it, too) and is largely safe from virtual security risks.
Having said that, any good software or payment service provider will have a range of measures in place to provide you with increased security for your assets. It’s worth also highlighting that a secure location will always be needed for physical cash too, certain methods of security hardware for in-person stores – think CCTV, alarms, even theft prevention officers – could have a serious impact on your business’ expenses, and keeping cash on site could make your insurance more pricey.
However, in a 2018 Access to Cash report, 51% of Brits still felt the ability to use cash for their transactions was important. So what is the best course of action?
Does all this mean you should consider going completely cashless for your business?
Maybe, maybe not. The decision to go completely cashless for your business relies on a whole host of matters - and shouldn’t be taken lightly. In-store card-based payments will still incur a merchant service fee from your provider, and while it's small, this might be something you wish to factor in if you run an in-person retail store - particularly if your shop is on the smaller side.
There is also a matter of inclusivity around cash. Only accepting the card or virtual payments could put you at risk of excluding certain demographics who might otherwise find digital finance challenging.
While it might not be as simple as "this or that'' when it comes to your preferred payment method, it's worth noting the impact the pandemic years have had on digitalised payments. With most shops not accepting cash, not to mention the waves where physically stepping foot in a store wasn't possible, virtual cards and digitalised payments become the path most often taken. While cash fell by the wayside.