Cash Is ‘Essential’ to Smaller UK Businesses

Around half of the UK’s small and medium businesses (SMBs) still rely heavily on cash according to new research, with over a third saying they have no intention of adopting cashless systems.

The research—conducted by iwoca, a major European small business lender—runs counter to the impression that Britain is ‘fast becoming a cashless society’ while giving more weight to nationwide efforts to secure access to cash facilities.

The UK is a hub of global financial technology, with FinTech Magazine reporting more than 1,400 high-growth, including 20 so-called ‘unicorns’, meaning companies that reach a valuation of $1 billion without being listed on the stock market—a dream goal for most tech startups. This, combined with a sharp rise in bank closures, has led to increased discussion around the ongoing role of cash in British society, with some claiming a cashless society is just around the corner. Research, such as a University of Bristol publication showing bank closures are not causing people to switch to digital payments, and cash demand remains high, paints a different picture.

iwoca’s data shows 46 percent of small businesses use cash on a monthly basis, and 32 percent on a weekly basis. While around a third have reduced their cash use over the past two years, the remainder continue using it, with some reporting greater demand from customers. 54 percent say their use of banknotes and coins has remained stable alongside an increase in contactless and online payments.

Payment choice is the leading reason for small businesses to support cash at 57 percent, while 24 percent are primarily concerned that fees associated with card payments remain too high.