Source: Alliance & Leicester
Cash is still UK businesses’ favourite for customer transactions. According to the latest findings released from Alliance & Leicester Commercial Bank’s ‘Cash Survey’, more than four in ten businesses (43 per cent) still see cash as their main payment method because it is ‘far easier to manage’.
Findings suggest that more than 19 out of 20 business (96 per cent) businesses still deal in cash.
The research also shows that many businesses do not accept other types of payment; with more than half of respondents not accepting payments via credit cards (62 per cent), and 65 per cent not taking debit card payments.
Whilst notes and coins are seen by businesses as easy to manage, other transaction methods prove more of a problem. Nearly half of small and medium sized businesses surveyed (45 per cent) believe that the cost of processing cheques and credit card payments is too high. However, for savvy SMEs, cheque charges are a thing of the past with banks such as Alliance & Leicester Commercial Bank now offering better value business bank accounts, which allow free and unlimited cheque transactions.
Russell Carter, Head of Cash Marketing at Alliance & Leicester Commercial Bank, said: "The Cash Survey confirms that cash is still very much a central part of the day-to-day operations of small and medium sized businesses in the UK. It is clear that, even in 2006, cash still offers significant advantages for businesses looking for easy management of financial transactions."
Carter adds: "Handling cash can be the most cost effective option, so it is imperative that businesses regularly review their finances and investigate the charges levied by their bank for cash handling to see if they can get a better deal."
The 'Cash Survey' reveals that the popularity of cash to businesses remains strong because of its ease of handling and its suitability for small and medium sized businesses. Despite this however, many businesses are actually paying over the odds in cash handling charges.
Research from Alliance & Leicester Commercial Bank shows that UK SMEs collectively miss out on a whopping £502 mill502 million a year by not shopping around for the best business current account, a process that could see them claw back nearly £300 million on cash transactions alone. The average small business spends about £425 on cash transactions each year when they could be paying around £80.
In addition, the research also found that cash transactions offer a best-fit for the everyday dealings of UK SMEs. One in seven UK businesses (14 per cent) say they still pay both wages and suppliers in cash. More significantly, over a quarter (27 per cent) say notes and coins are an essential part of their cashflow management.