Lack of cash alternatives costing SMEs £9.4 billion annually
Failure to offer alternative payment methods to cash transactions is costing small businesses billions of pounds, according to new research.
Sage have reported that SMEs are losing £9.4 billion annually through cash transactions, with theft, human error and poor management among the reasons why.
Some 24% of firms said they had faced a cash theft by a member of staff while 34% said human error had caused them to lose cash.
Counting and transporting cash to the bank was wasting anything up to an hour every week for 56% of businesses too.
The cost of cash led 34% of those questioned to say it will not be as popular in 20 years, while contactless payments are expected to be the most favoured method by 2020.
All of the data, included in the latest Payments Landscape report, highlights that consumer demand is driving innovation, as 90% of consumers say businesses need to offer diverse payment options.
Six in ten people said they would be more likely to shop elsewhere if options were not available, highlighting a preference for card payments.
Sage Pay Chief Executive Seamus Smith suggested that cash is “bad for business, is costly and inconvenient” adding that flexible options are growing in popularity.
Small businesses need to keep pace with change or they run the risk of missing out on potential sales, as well as losses resulting from cash management.
Depending on the scale of such losses, it may place pressure on a business’ finances or ultimately drive them towards corporate recovery methods.
Undertaking an independent business review may reveal solutions or uncover other issues that require management.
A number of firms are looking at their payment options, as Mastercard has launched, and Alibaba is set to launch, new systems for customers.
Link is also reviewing requirements for ATMs on the basis that not as many are required in a potentially cashless society.
By Phil Smith