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Why SMEs need to go cashless to keep up

16/01/2019

At Sweeny Ted’s barber shop in Holywell, north Wales, a young customer recently paid for a haircut with his watch. “It was a first,” admits the owner, Ted Palmer, whose business only dealt in cash until 18 months ago. “I had thought about it, but our most expensive transaction is £6.50 and the cost of people paying by card would have been prohibitive for us, but I knew that I would lose customers by not offering cashless facilities.”

From card machines to marketing

Small firms were put off in the past from going cashless because of the expense, explains Clare Bailey, an independent retail expert. “It used to cost thousands of pounds to set up a card system and keep it running each year, but now there’s a choice of methods. “Last year and for the first time, more than half of all purchases in the UK were made by card, so any small company that wants to succeed must offer its customers as many options to pay as possible.”

The benefits of cashless transactions are self-evident, thinks Ms Bailey. “You save time in not having to ring up a till and take money to the bank, which means greater security and reduces staff theft.” Then there are added bonuses – for example, some systems give anonymised data back to retailers about shopper behaviour and how to relate better to them. She adds: “Digital payment systems have other useful add-ons, including electronic receipts so that customer details are online and can be used for further promotion and marketing.”

Going cashless

The UK e-commerce sector is worth hundreds of billions of pounds and is growing rapidly, so it’s no surprise that SMEs are tapping into it. The main methods of paying are credit or debit cards and PayPal, a hugely trusted brand, according to Nielsen Online Buyer Insights, which claimed in a 2013 study that offering the service as an option boosts customer numbers by 27pc in the first year of use.

You also need to make going cashless part of your business strategy, instead of being forced into adopting a card machine to survive. Ms Bailey points out that Uber’s cashless payment method has transformed the taxi scene in many countries, with London black cabs having to accept cards in order to stay in business. “Time is running out for SMEs who haven’t yet taken the step to offer their customers payment options,” she says. “It’s time to go cashless to keep ahead.”

Source: Telegraph