Cash-only businesses are risking sales and shopper loyalty this Christmas
Cash-only businesses could be about to forfeit sales of 2bn in the month leading to Christmas this year, but the potentially permanent loss of custom might cause greater concern.
After polling over 1, 000 British consumers, Paymentsense found that almost half would walk out of an independent caf, restaurant or retailer if electronic payment methods were not available. More worryingly, one in four would never return to an outlet if it was cash only.
According to the findings, UK shoppers spend on average around 135 each month in independent establishments. With 80 per cent of respondents owning a contactless card, and the high walk-out rate, archaic payment options could create a sales black hole of 2bn.
The message hit hardest for London’s independent retailers. Capital residents were spending almost 100 more a month in local establishments than the national average, but were more likely to walk out of a cash-only business.
Read more: In-store technology the key to high street success this Christmas
Past research has shown that shoppers equate in-store technology with the type of convenience they find online, with hand-written receipts a further indicator of a business lagging behind expectations. Meanwhile, small business owners investing in payment technology have benefited from the raised payment ceiling of 30, and a majority of UK retailers have backed lifting the limit further to 50.
The latest study confirms that cash-only businesses reluctant to meet the expectations of consumers risk both sales in the short term, but also the permanent loss of custom.
Commenting on the research, Guy Moreve, head of marketing at Paymentsense’said : Contactless card payment is fast becoming the norm, with our research showing that most consumers now use credit and debit cards. Shoppers now expect to use them almost everywhere – both in a traditional or contactless manner.
as well as the significant revenue loss, our study suggests that smaller retailers and cafes who don’t yet take card or contactless payments, could permanently lose every fourth customer, which would be a particularly difficult blow at this busy time of year, he added.
Researchers were able to calculate how much shoppers were spending on their cards with small businesses in different UK cities each month
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.