You may have noticed fewer “cash only” signs in store windows as businesses begin to enthusiastically embrace chip + PIN and contactless payments. Interestingly though, our research revealed that up to three million small businesses in the UK still weren’t accepting card in 2017. And when you consider that the total count for UK SMEs is 5.7 million (SMEs being businesses with fewer than 250 people), that’s a significant number missing out on potential sales.
Accepting every way your customers want to pay is crucial to cash flow. But if you’re not convinced it’s time to become less cash-reliant, here are four considerations that might sway you.
More customers and more sales
People want convenience, and if buying from your store means a trip to the ATM, there’s a chance they’ll find somewhere else that doesn’t on the way. Taking credit and debit cards and mobile payments ensures that you offer the best customer experience possible — you become the go-to for ease.
Cash-only businesses are likely to see an increase in revenue by changing their approach, as cash now accounts for just 22% of payments, according to the BBC — the rest is happening via card and mobile. People like to spend their money in the way that suits them best. If most prefer card (as apparently they do), cash-only businesses are sure to miss out on sales and new customers.
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One way to grow your business is to increase your average transaction size. A study by Dun & Bradstreet found that people spend 12% to 18% percent more when using card instead of cash. Customers are also 12% to 15% more likely to always tip with a credit card, and then tip up to 13% more.
So imagine a café whose average transaction size is £15, and whose customers normally tip 10%. Based on the numbers above, each transaction would increase (+12%) to £16.80, followed by a tip of £2.20 (13%), making the average transaction size £19. If that café made 80 sales in a day, they’d see an uplift of £320 (£1,200 vs £1,520). Imagine where you could spend all that extra.
Faster deposits and improved cash flow
Some business owners may choose cash over card payments because they feel it gives them more control over when they get paid — they manually make the deposits, in theory helping them manage cash flow.
The thing is, you can get paid a whole lot faster without cash. Square deposits funds into your account the next business day. And if you need those funds even faster, our Instant Deposit feature will release the money within 20 minutes*, whatever the time of day or day of the week (even on bank holidays). So with card, you not only get to scrap the hassle of storing cash securely on-site and taking it to the bank, you get to reinvest the money you make almost immediately.
It’s a simple one, but one that every small business needs to think about. Your regulars are the lifeblood of what you do, so how do you make them happy and keep them coming back? Our research revealed that 58% of Brits prefer to use their cards over any other form of payment — less than a third of us prefer cash. That preference is an indicator of what makes people happy. And happy customers are customers that spend more, and more regularly.
Accepting card payments can also demonstrate to customers that your business is legitimate. Having logos for all the major cards you accept at your point-of-sale or in your store window instils a sense of trust. And trust ultimately leads to happier customers.
Accepting card and mobile payments helps you build better relationships with your customers whilst increasing cash flow. And it’s affordable — signing up with Square is free, there are no monthly charges or long-term commitments and every in-store transaction is charged with the same 1.75% fee. You can get started with our pocket-size reader, and gradually build your setup from there.
Funds are subject to your bank’s availability schedule, but are generally available in your bank account within 20 minutes of initiating Instant Deposit.