Small and medium sized enterprises (SMEs) in the UK are losing billions each year through cash payments due to theft and human error, according to new research.
A total of £9.4 billion every year is lost, according to the study by Sage. Almost a quarter (24%) of business builders say they have been the target of cash theft by a member of staff, 34% admit to losing cash due to human error, while more than half (56%) 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% 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, which polled businesses and consumers in the UK, found that innovation in payments is being driven by consumer demand. The majority (90%) of consumers claim it’s important for businesses to offer customers a diverse range of payment methods while 58% claim they would be more likely to shop somewhere that offered them multiple ways to pay.
The research revealed older age groups demonstrate a greater willingness to move away from cash, with 59% of over 50s saying that they either don’t deal in or have little dealings in cash.
Seamus Smith, CEO of Sage Pay, said: “Our research proves that cash is bad for business. It’s costly and inconvenient, and appetite is growing for more innovative and flexible payment methods.
“The stats we’ve seen come out of this study are part of a wider trend. We know that cash use is in decline. The number of cashpoints in the UK have hit a peak, yet people are withdrawing cash less and less. 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.”