SMEs are losing £9.4 billion each year through cash transactions, according to new research by Sage.
The research reveals that almost a quarter (24 per cent) of business builders say they have been the target of cash theft by a member of staff, 34 per cent admit to losing cash due to human error, while more than half (56 per cent) say they spend up to an hour or more counting and transporting cash to the bank each week.
Such is the cost of cash that 34 per cent believe it will become far less prevalent within the next 20 years, with contactless set to be the most popular payment method by 2020. This is according to data released today as part of Sage’s sixth annual Payments Landscape report, a study into current and future trends in payments.
The report finds that innovation in payments is being driven by consumer demand. The majority (90 per cent) of consumers claim it’s important for businesses to offer customers a diverse range of payment methods, while 58 per cent claim they would be more likely to shop somewhere that offered them multiple ways to pay.
Older age groups demonstrate a greater willingness to move away from cash, with 59 per cent of over 50s either don’t deal in or have little dealings in cash transactions.
Seamus Smith, CEO of Sage Pay, thinks that cash is bad for business, is costly and inconvenient, and that appetite is growing for more innovative and flexible payment methods.
He says the research shows that cash use in in decline and this is part of a wider trend, highlighted by the increase in UK cashpoints but the decrease in cash withdrawals.
Smith adds, ‘Link is reviewing the need for hole-in-the-wall machines as consumers opt for more innovative types of payments. At the same time, Mastercard has recently launched ‘selfie pay’ and Alibaba is soon to introduce a virtual reality payment system.’
‘Payments should be seamless, frictionless – and more often than not, cashless. Innovation in the sector has never been greater but Small & Medium businesses must keep pace with change. They are the lifeblood of the UK economy, and their success is critical to our national growth.’