Cash may be king, but for small businesses, cash is expensive.
New research from Sage finds that small businesses in the U.K. are losing out on $11.8 billion every year because of their cash transactions. Those costs can rack up in a number of ways, researchers found.
For instance, nearly a quarter of small businesses surveyed by Sage said they had been the target of cash theft by a member of their own staff. Meanwhile, more than a third said they had lost cash because of human error.
The majority of companies (56 percent) said they spend up to an hour every week to count and transport their cash to the bank.
“Payments should be seamless, frictionless and, more often than not, cashless,” said Seamus Smith, Sage Pay CEO, in a statement. “Innovation in the sector has never been greater, but small and medium businesses must keep pace with change. They are the lifeblood of the U.K. economy, and their success is critical to our national growth.”
According to Sage, the billions of dollars lost every year by small businesses because they rely so heavily on cash transactions highlights the need for SMEs to embrace digital and innovative payment solutions, which are already in high demand by their customers. According to researchers, 90 percent of consumers agree that the businesses they shop at should offer a variety of payment options, and 58 percent said they would be more likely to shop at a business that offered more ways for them to pay.
Sage researchers, for another report, its annual Payments Landscape study, also found that the importance of cash is on the wane. According to the report, 34 percent of SMEs surveyed said cash is likely to become much less prevalent over the next two decades. Respondents pointed to contactless payment technologies as the ones expected to be the most popular by the end of the decade.
Even so, the PYMNTS Global Cash Index finds that cash continues to beat mobile P2P payment apps, at least in the U.S. The Cardtronics 2016 U.S. Health of Cash Study revealed that 84 percent of U.S. consumers say they would prefer to keep some cash on hand.