The owners of small UK companies have been told to invest in modern payment methods that are more secure, or face contributing to the 9.4bn lost each year as a result of handling cash.
A new report from online transaction gateway Sage Pay, based on poll data of 2, 000 consumers and businesses, found that almost a quarter of company owners surveyed had been a victim of theft from an employee, while 34 per cent confessed that cash had been lost as a result of human error.
The study also revealed the extent to which cash was a drain on productivity. Over half of business owners admitted they spent at least an hour every week paying cash into a bank or counting money.
A growing acceptance of contactless payments amongst consumers was uncovered by the study. Some 14 per cent of survey respondents rated the method highly up five per cent on the previous year’s survey while 38 per cent of all consumers said they regularly carried contactless payment.
According to the study, both business owners and consumers agreed that contactless payment methods would become the most popular transaction by 2020 yet just 12 per cent of businesses were prepared to invest in the technology in the short-term.
Commenting on the research, Seamus Smith, chief executive of Sage Pay, warned that ‘small businesses must keep pace with change, as growing innovations in technology, customer expectations and security risks all point towards a need for companies to become cashless.
our research proves that cash is bad for business. It’s costly and inconvenient, and appetite is growing for more innovative and flexible payment methods, Smith said in a statement.
“The stats we’ve seen come out of this study are part of a wider trend. We know that cash use is in decline. The number of cashpoints in the UK has hit a peak, yet people are withdrawing cash less and less, ” he added.
The research found that security remained the number one issue for consumers when making a payment rated as more important than both cost and convenience while a quarter of business owners surveyed invested no money into fraud protection.
The importance of a fraud detection and deterrent strategy for entrepreneurs looking to break into overseas markets was also highlighted. Security breaches on cross-border transactions were found to be three times higher than domestic payments.