Dealing with cash costs small businesses around £942 per year, cutting into time and profits, new research by Paypal has claimed.
56% of small businesses in Britain take cash, with 1 in 10 only taking payment by cash and cheque. A poll of 500 businesses that accept cash payments found that, on average, these companies have to spend 12 days a year just counting the money, with more time needed to physically take it to the bank. Add to this the banking charges that business owners shoulder when paying in cash over the counter, and the combined time and financial impact can equal two days’ takings for the average small business.
What’s more, with two UK bank branches closing every week, dealing in cash is getting less and less convenient – and more and more expensive. Nearly a third of those polled employ at least two people who count cash regularly, whilst more than half count it by hand.
Narik Patel, Director of Mobile Merchant Services at PayPal UK, said of the findings: “Many small businesses only allow customers to pay with cash because they think it’s a cheap way to get paid. But our research reveals that the hidden costs of cash really add up. And that’s before you consider the sales you lose through turning away customers who want to pay by card.”
“The research shows that more than two thirds of small businesses still think card payments are too expensive,” Patel continued. “The good news is that this is no longer true. Last year we launched PayPal Here in the UK, which lets businesses take card payments anywhere – and as it’s pay as you go, you only pay a small fee when you take a card or PayPal payment.”
Claire Aggarwal, Co-Founder of Perfect 10, a mobile beauty business, agrees. “One of the most frustrating things for a small business is having to rely solely on cash and cheques,” she said. “As a mobile beauty business, we used to take up to 20 payments a day in cash, which meant we had to carry a lot of it around before we could get to the bank, and then wait around to pay it in. Now we take cards using PayPal Here and it’s really taken the pain out of getting paid.”