Among the many changes the rise of online shopping and digital payments have brought to the small business landscape was accelerating the move to a cashless society.
While 87% of UK households  made a purchase online last year, cash payments fell by 35% in 2020 and five out of six payments  are now cashless payments.
The Bank of England reports that 42% of customers have visited a business that did not accept cash in the last six months, and some 13.7 million Britons now lead a cashless life . A range of well-known brands have stated that they will not accept cash payments including Ikea and BrewDog .
Running a small business in a cashless society
Some small businesses have greeted the change with a certain level of apprehension. According to online marketing consultant Louise Brogan: “Some SME owners worry about not being able to offer choice to their customers. Those with smaller transactions are more concerned about this aspect, while businesses with older customers or those on low incomes want to be able to offer cash payments.”
When the Harley Street Health Centre moved to cashless payments in January 2020, Managing Director Alya Shakir was concerned about implementing something that might be complicated, expensive or confusing for customers. “It was tempting to think that if the system isn’t broken, don’t fix it, but actually what we realised was that advancing technology in this way has been transformative for staff and patients,” says Shakir.
What are cashless payments?
Cashless payments are transactions that are conducted electronically, without using bank notes or coins. There are several ways of making cashless payments: with credit or debit cards, digital wallets on smartphones and other devices, or by bank transfer.
Benefits of using cashless payment systems
Accepting cashless payments via new Square contactless terminals means front-office staff at the Harley Street Health Centre can process payments swiftly, while limiting contact with customers. “It’s made payments far quicker and more efficient. We were using a medical billing company that involved a lot of paperwork but with the new terminals we can process all payments in-house immediately,” says Shakir. “It feels a lot slicker and helps us seem more professional and trustworthy,” she adds.
Make your money go further by paying for digital payment terminals with your American Express® Business Gold Card, which is accepted by Square, Stripe, SumUp and many other cashless payment providers. It gives you up to 54 days until payment is due¹, plus you can earn Membership Rewards® points every time you spend².
Going digital can also add a layer of security. “With cashless payments, businesses don’t have to spend time balancing their tills, they don’t hold cash on-site, they don’t have to travel physically to the bank to deposit cash and there are no issues with worrying if someone is ‘dipping’ into the till or making mistakes in calculations,” says Brogan.
The Harley Street Health Centre use their digital payment platform to see real-time insights into revenue streams, which give an instant snapshot of how the business is performing. “I can see right away if we’re getting more family planning appointments, or how a new service is going,” says Shakir. “I can also look at each clinician and know if they’re seeing enough patients, are they over-worked, do I need to recruit more people?”
Get informed on cashless payments
When it comes to giving customers the convenience of digital payments, knowledge is power. “Talk to other business owners you know who have made the move and find out what they like about it. Chat to your bank and see if they have tips to help. Most digital payment software will have clear advice and support online — check their websites,” says Brogan.
SME owners need to invest time in doing some research to understand your options and vet the various players to pick the right one. You should also learn how the integrations need to be implemented to fully benefit from the advantages that digital payments bring. Remember that cashless payments is just one of the ways you can use technology to help sustain your business.
Implement robust cashless payment systems
Experts agree that it’s important to be organised. "If a company is taking BACS transactions, they need to make sure that each payment has a proper reference number so they can connect the payment to the right customer," says Brogan. “Create a system for balancing your online accounts on a regular basis—if you are using invoicing, set up a clear reference system to keep track of payments.”
Make cashless payments an add-on
It’s important for small businesses to recognise that, at the start at least, digital payments won’t totally replace cash. For example, a recent survey from Age UK reports that one in five older people still rely on cash for most of their day to day spending .
But business owners need to be aware that going at least partly cashless will soon be the norm. According to Brogan: “Having spoken to several small-business owners...attitudes towards digital payments have changed. A lot of small businesses, including retail, have moved to cashless as it has been easier not to handle cash. Quite a few have said they wouldn’t go back to a cash-based business.”
If you're ready to make the switch to digital payments, use your American Express Business Gold Card to get started. With no pre-set spending limit³, you can invest in digitising your business processes and maximise your Membership Rewards at the same time.
- The maximum payment period on purchases is 54 calendar days and is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date.
- Membership Rewards points are earned on every full £1 spent and charged, per transaction. Terms and conditions apply.
- No pre-set spending limit does not mean unlimited spending. Purchasing power can adjust with your use of the Card, your payment history, credit record, financial resources known to us, and other factors. We reserve the right to apply temporary spending limits in accordance with the Cardmember Agreement.