The end of cash? Half of customers would walk away if cash is the only payment option
5 min read
23 October 2017
September marked the ten-year anniversary of the introduction of contactless payment cards in the UK. Since 2007, we have seen a dramatic change in the way that consumers are choosing to pay for their goods and services.
In a recent survey, we found that card payments are now the preferred method of payment for 59 per cent of UK shoppers. Does this spell the end of cash?
While large businesses usually offer a range of payment options, it is still the case that many independent retailers are failing to offer their customers choice. This is a high-risk approach, given we know that businesses accepting cash only risk losing one in every two customers.
It is in the interest of small businesses to carefully consider the benefits of the payment options, provided as this interaction plays a huge role in the overall customer experience and whether or not a sale is closed.
Make the most of your business data
Understanding the needs and demands of customers is critical to the prosperity of the business. Offering great discounts and a friendly face at the door is wonderful for customer relations, but it doesn’t enable business owners to really understand their buying behaviour.
By getting a handle on the data under the bonnet of the business, owners and managers are able to gain invaluable insights into customer demographics such as location, age profile, gender and also spending behaviours.
These data points and statistics shine a light on customers’ likes and dislikes, enabling decision makers at businesses to build the individual experiences today’s customers value so much – such as tailored offers, anniversary reminders, invites to special events and more.
Meeting the needs of customers helps ensure that businesses build a loyal customer base who will return time after time.
The end of cash? Contactless set to overtake
The UK Payment Markets Report 2017 predicted that by 2018, contactless debit cards will overtake cash to become the most popular payment method at the tills.
With the rise of new contactless technologies such as Apple and Android Pay, competition is continuing to grow in the payment acceptance space.
While smaller retailers may be put off by the perceived costs that are involved with card acceptance, the marked changes in card interchange fees have meant many are finding credit card processing costs have reduced.
With cash far less popular than it was ten years ago, there is an evident move towards the ease of ‘tap and go’ methods of payment and the end of cash.
However, not all Brits are ready to go completely cashless just yet. Our research also revealed that while 69 per cent of over 55s still carry cash “in case of an emergency”, just 20 per cent of this age group would be willing to completely cashless, compared to 50 per cent of 18-24 year olds who would be willing to wave goodbye to see the end of cash.
Don’t give customers a reason to walk away
Speed and security are among the top concerns for time-pushed, busy shoppers. Our research shows 98 per cent of customers in the UK prefer paying with contactless cards because it is faster. Elsewhere, 48 per cent of shoppers say they look for an efficient shopping experience “with little interaction with store advisors”.
Thanks to multiple options both online and on the high street, shoppers are spoilt for choice – so they will naturally end up where their needs feel best served. It’s all too easy for them to take their business elsewhere, that’s why it’s essential businesses provide a seamless experience in order to win returning customers.
It’s not a question of should we accept card payments? In fact, small businesses must ask themselves: can we afford not to accept card payments?
It’s those businesses with an eye on the changing payments landscape and discussions around the end of cash, who are willing to evolve along with it, that will reap the benefits in the long term.
Identifying the changing needs of your customers and making mindful adaptations to your payment acceptance strategy is essential to see the sustained growth and success of the business, whether we see the end of cash or not.
Russell Jones is head of sales at First Data