Could we get by as a cashless society?

Comments by Mark Latham, Product and Innovation Director of Handepay

 

As cash use falls – down 14% in the past five years according to the British Retail Consortium – while at the same time spending on cards topped £0.5TRILLION in 2013 (UK Cards Association), we decided it was time to find out.

 

On Saturday June 21, 2014, we chose a street full of independent traders in Manchester to become the UK’s first ever cashless street, for one day, as a social experiment to gauge the reaction of business owners and shoppers.

 

Beech Road in the suburb of Chorlton is typical of many UK high streets in its mix of stores – a newsagent, a bakery, a deli, bars, restaurants, takeaways, clothes shops and gift shops. However, the fact they are all independents is what made them the perfect testing ground for this experiment.

 

Research from one of the major banks last month revealed that 58% of small businesses still don’t let their customers pay by card – that means a lot of retailers are missing out on a lot of spend.

 

Typically, small business owners tell us that the reason they resist taking card payments is that they think it will be too expensive, too much hassle or that their business isn’t right for cards.

 

On Beech Road, the newsagent and the baker have been reluctant converts to card payment machines, but both have acknowledged this is the way that many of their customers WANT to pay – and they cannot be ignored.

 

Now, the newsagent does more than half of their turnover on a weekend from card payments as customers bundle small items together to get the convenience of paying on card.

 

Elsewhere on Beech Road, the bars all reported a rise in card transactions as customers opted to open tabs. One restaurant, The Laundrette, even reported a record day for turnover.

 

The public shopping on the street were keen to engage in the experiment. 53% said that they would shop local more often if they knew that every shop took card payments, while 60% said they had left a shop in the past as the option to pay by card wasn’t available. On average, these consumers use their plastic 2.5 times a day – and the average amount of cash they had on them was £19. Only 43% thought we were ready for a cashless society.

 

That’s OK – we never expected that we would discover we’re ready to give up cash just yet. But we are delighted that so many independent businesses took the opportunity to engage their customers about how they like to spend.

The future for the local high street is in making it as easy as possible for customers to shop there rather than lose business to a chain store, supermarket or a retail park/mall. That’s what the cashless street was all about.

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