A new £5 note has been released into circulation throughout England and Wales, with the dual aim of reducing counterfeit reproduction and being more environmentally friendly.
Designed to be more durable than existing bank notes, the so-called “plastic fiver” is made from flexible polymer material – expected to last up to five years – as opposed to the two-year life expectancy of notes already in circulation.
The release of the new Bank of England note can be seen as an acknowledgment that the country remains a long way from becoming a cashless society, with updated security features included to make it significantly harder for fraudsters to produce fakes.
Despite the increasing prevalence of contactless payment methods among UK consumers, counterfeit currency remains a significant problem, with as much as £3.3m in fake money having been removed from general circulation in 2016 so far.
Lee Murphy, owner of software accountancy firm Pandle, has warned that despite the security measures of the new note, businesses in the UK are safer using contactless transactions, “as every card payment can be traced from origin, unlike cash”.
Commenting on the rise of contactless payment, Howard Berg, senior vice president at digital security company Gemalto UK & Ireland, argued that “the fact that almost all Brits are still using cash highlights that we are still a long way from a cashless society”.
Bad debt and poor credit management remain significant challenges for small firms, and keeping physical reserves of money can be crucial to the cash flow of a business.
According to a Direct Line for Business study in August, 82 per cent of SMEs were owed outstanding debts, with a combined £5.8bn written of in the last financial year.
Poor credit management has contributed to the low survival rate of new businesses, as only four in ten make it past the first five years of trading, according to a study released by Ormsby Street in August. The study showed that an average of £31,330 was written off by small businesses, while almost one in ten wrote of debt in excess of £100,000.
Late payments also continue to hamper the cash flow of small businesses. A recent study by the Asset Based Finance Association (ABFA) indicated that Britain’s micro businesses are disproportionately hit by late payments – waiting up to six weeks longer than larger firms to settle debts.
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