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Is cash still important to businesses?
Posted by Martin Kearsley, Banking Services Director at the Post Office
Cash looks set to remain an important part of everyday life for much of the UK – both now and in the future, according to new research from Post Office exploring both consumer and micro trader views on the Future of Cash. The study revealed that people of all ages continue to rely upon cash to make essential purchases and fund everyday spending, with 9 in 10 (91%) wanting to retain the choice offered by different payments rather than moving to a cashless society in the immediate future.
While the study highlights the frequency with which many people are still using cash personally, it also highlights their recognition of the role it plays supporting local economies, communities and different groups within society.
Just under a third (30%) say that small businesses remain dependent upon access to cash, and 26% do not think their community has the infrastructure in place to go completely cashless, with those in suburban (30%) and rural areas (28%) equally concerned.
The study highlighted -
- Half (50%) of micro-traders still think it is important for their business to have access to cash
- Across the UK, over two fifths (44%) find the convenience of cash beneficial to their business
This sentiment is echoed by many small businesses themselves, with the study exploring the experiences of more than 1,000 micro traders from across a range of sectors and regions. The findings revealed these smallest businesses handle an average of £731 a week in cash, with this remaining one of their most commonly (59%) accepted methods of payment.
One of the main reasons for micro business’ continued acceptance of cash is in response to customer demand. A third (31%) do not ever expect to disregard cash payments completely, and 59% do not expect to make this change in the near future. This reluctance to move to a cashless business model is largely driven by customers’ behaviour; more than half (54%) of those who do not expect to go cashless within the next 18 months say this is because their customers want to pay in cash.
The study also confirmed that whilst cash is still valuable to micro-traders, a significant amount struggle to have access to cash services -
- Over a quarter of small businesses (27%) do not have access to a bank branch in their local community
- Over two fifths (43%) of micro-traders in rural areas don’t have a bank in their local community
Commenting on the research, Martin Kearsley Director of Banking Services at Post Office commented: “Many do not realise how much we still use cash until we find ourselves without access to it.
“Consumers and businesses we’ve spoken to have told us that they want choice and flexibility in how they manage their money and make payments – whether cash, card, mobile or online. In light of continued bank branch closures and reductions in the ATM network, a lot of people are concerned about where to access cash conveniently and safely. Their local Post Office is the answer – providing access to their existing bank account for everyday services such as cash withdrawals, deposits, change and cheque and balance enquiries supporting communities all around the country with these essential Everyday Banking services.”