A scheme in the US could pave the way for something similar according to Visa who is considering offering incentives for UK businesses to go cashless.
In the United States, the card giant has selected fifty companies with a $10,000 incentive ‘if’ they go cashless. Each business has to pitch to Visa to explain why they and their customers would benefit from the cashless operation.
The scheme has already come under fire here in the UK with consumer groups saying that many people rely on cash still and it could lead to vulnerable people being well out of their comfort zone.
In the United Kingdom, there are currently circa 2.7 million people who rely almost entirely on cash which equates to 5% of the adult population.
“It is easy to categorise it as a bribe, but ultimately they are incentivising companies to do away with cash, and that’s not the job of people like Visa,” said James Daley of consumer group Fairer Finance.
But retailers are fearful that going cashless too soon will have an impact on their bottom line. Each time a business takes a payment on the card they pay a fee to the card processor. It currently works out at an average of 0.16p on credit card transactions and 0.5p on Debit cards.
The total that retailers paid in these fees last year totalled £800 million. These charges have come under criticism from British Retail Consortium (BRC) who reported that card payments have already overtaken cash payments. So could cash be leaving us for good?
— BRC (@the_brc) July 12, 2017
Card payments are clearly evolving over time to naturally become the way we transact. This will be a future mix of card and device payments.
“Companies should embrace the change. There are many benefits for the customer which makes the transaction process easier and more attractive at the point of sale” said the British Merchant Cash Advance Association (BMCAA)
There are many benefits of taking card payments with a credt card machine some of which are listed below:
- As a business, your competitors are almost certainly already taking card payments. You should too.
- The processing of cash can be heavy on administration. Providing change and logging transactions, checking counterfeit and going to the bank to deliver cash over the counter – all of which can be cumbersome and time-consuming.
- Processing sales on a card can remedy this and provide a clear track of sales for administration purposes.
- You can track analytics to see when your busiest times are which can help with the provision of staff and marketing drives.
- Card and digital payments are the future. Customers are expecting the option at the point of purchase.