Could you be losing customers by only accepting cash?

For any business, managing customer expectations is always high on the agenda. However, so is cashflow and balancing the two can sometimes be tricky, particularly if you are a start-up or small business with low turnover.

According to a recent survey by the card payment app tapeeno, more than 95% of small business owners are put off by lengthy-contracts and monthly fees when using card payment machines. However, cash use has been declining over recent years, accounting for just 15% of payments in 2022 according to the Office for National Statistics. This is expected to drop even further to 6% by 2031, despite the slump in cash use easing since the pandemic.

It is now common to see many retailers with signs saying ‘card payments only’ or ‘no cash accepted.’ This can be frustrating for customers who use cash as their preferred method of payment, so for small businesses it makes sense to accept cash for goods or services.

However, it’s not always viable for businesses to only accept cash – especially when the competition chooses to provide alternative methods of payment. For example, if you operate a mobile food stand attending events or marketplaces where there’s lots of other competitor stalls to choose from and you only accept cash, you could be isolating a huge proportion of your customer-base.

In fact, a study by Samsung in 2021 found that more than half of Britons very rarely or never take cash out with them, instead using their card or mobile phone to make payments. Furthermore, only 14% of the nation always carries cash, which drops to just 8% for those aged between 18 and 29.

As a start-up or small business dealing with customers face-to-face, it can be difficult to weigh up the pros and cons between investing in a card payment device and only accepting cash payments. Cash payments, after all, don’t cost your business money in monthly fees and there are no lengthy contracts to sign up to when handling it.

Jaime Lowe is Sales Director of UTP Group, which provides card payment machines and developed the new card payment app for small businesses called tapeeno. She said:

“It’s true that traditional card payment technology has been extremely prohibitive for small business owners who turnover less than much larger companies. We’ve invested a great deal of time and research into how we ease this burden for those businesses turning over less than £2,500 per month, who might not want to use a card payment machine, but realise they have little choice in the current economic climate.

“Part of this was developing something that would support these businesses without saddling them with contracts or monthly fees. That’s when tapeeno was created – a downloadable app that works directly from your smartphone and requires no additional hardware, no contracts and no monthly fees. You can use it as often or as little as you like and you will only ever pay 1.50% per transaction, which is a huge saving compared to traditional card payment devices. This means you can continue to accept cash, while having the competitive advantage of a card payment device that won’t cost money if you aren’t using it.”

Cash is still an essential part of society with many people continuing to rely on it for everyday payments. However, as more and more people opt for the convenience of using cards and phones, for businesses, offering cashless alternatives is essential.