Despite the convenience of card payments, a number of small firms are still only accepting cash payments from their customers, and this is having a negative impact on their finances.
According to a study commissioned by online payment provider, PayPal, processing coins and note payments is costing Britain’s small and medium enterprises (SMEs) up to £2.5 billion a year in charges.
That’s almost £1000 per company – two days’ takings for the average British small firm.
Despite this, half of small businesses continue to accept cash payments, while one in 10 will only accept cash or cheque.
Narik Patel, director of mobile merchant services at PayPal UK said: “Many small businesses only allow customers to pay with cash because they think it’s a cheap way to get paid.
“But our research reveals that the hidden costs of cash really add up. And that’s before you consider the sales you lose through turning away customers who want to pay by card.”
Counting cash and visiting the bank to make regular deposits also means that businesses are spending valuable time away from trading, which could also be impacting finances in the long-term.
In the PayPal study, a third of those surveyed said that at least two of their staff members count cash regularly, while 55% said that they still count cash by hand.
This research comes to light following a separate study carried out by small business payment provider, Kalixa Pro which revealed the increasing use of card payments among British consumers.
Results showed that 71% of British customers will carry less than £20 in cash at any time, while half say that they will not walk more than 100 metres to find a cash machine.
Furthermore, 25% of respondents said they have refused to purchase anything from a shop or tradesman who has been unable to take card payments.