- with Finance and Tax Executives
The increasing popularity of card-only establishments across British high streets is becoming more pronounced; it is no longer uncommon to hand over cash for a simple purchase only to hear "sorry, but we're card only". Firm believers in the old mantra "cash is king" may find themselves increasingly inconvenienced as businesses favour digitalisation.
For businesses, the appeal of cashless operations extends far beyond avoiding the inconvenience of handling coins and notes. Cash management represents a hidden operational burden that includes time spent counting and reconciling tills, security risks, updating records based on manual counts and the staff costs associated with these activities. Card-only policies eliminate these friction points while providing immediate digital records that can integrate seamlessly with accounting systems and inventory management.
However, the shift towards cashless retail can create significant exclusion issues that extend beyond simple convenience. Elderly customers, those without bank accounts and individuals who prefer to manage funds through physical cash allocation can find themselves increasingly excluded. Relying entirely on digital transactions is also not without its own risks; ATM network Link found that 61% of respondents to a survey reported experiencing payment failures. In instances of unsuccessful digital payments that lay on the business-end of the transaction rather than the consumer, the lack of an alternative such as a cash till may lead to consumers shopping elsewhere.
The regulatory position is not too ambiguous. A requirement to accept physical currency is not outlined in legislation, leaving the floor open for businesses to decide which mode of payment they are willing to accept. Although the FCA brought in regulations applicable to financial institutions in 2024 regarding safeguarding access to cash, the regulator clarified in their consultation paper that acceptance of cash was beyond the remit of such regulations.
The cashless trend appears irreversible, but its implementation raises important questions about accessibility to services in the pursuit of operational efficiency.
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