How Much is Cash Costing You?

For those businesses and retailers who also handle cash payments in-store or onsite, there are compelling reasons to cashless societyembrace a cashless society.

Cash costs businesses money.

Accordingly to a report commissioned by PayPal, cash is costing UK SMEs £25 billion per year. It hurts businesses in 5 key areas:

  1. Time spent accounting for cash: on average companies spend 12 days per year counting money,
  2. Banking charges: the cost of paying in cash over the counter,
  3. Time spent travelling to and from banks: combined with bank charges this equates to two days’ takings for the average small business,
  4. Inaccuracies in accounting for cash: this includes mistakes made during customer transactions (for example, giving too much change), and inaccuracies in banking cash,
  5. Lost sales: where cash is the only payment option and therefore sales opportunities are missed.

Many small businesses are missing out on opportunities to reduce costs and increase profits because of the belief that ‘cash is king’. For those companies, especially mobile businesses who do not want the expense of using point-of-sale card terminals, there are other electronic payment alternatives. Online payment portals can be used onsite where the customer is present; either on a desktop computer or, as is more common, on a mobile device.

Online Payments: An Alternative To Cash

Businesses that have traditionally only taken cash, cheques or bank transfers – such as mobile hairdressers, building firms and service providers – can provide their customers with more convenient online payment methods and reduce the cost of handle cash significantly.

Many businesses like these are now using virtual terminals, a web-based system that allows you to manually process credit or debit card orders which are received by fax, mail order or telephone (MOTO).

What About Cyber Threats And Payments Security?

Carrying cash has always had its security issues. However, as the amount of cash the average person carries in their wallet has decreased (under £20 accordingly to a One Poll survey) and EMV technology has reduced card theft, a new threat has emerged. Identity theft and online payment fraud give consumers, retailers and card payment companies cause for concern.

While there are many fraud solutions tools the eCommerce merchant can use, perhaps the biggest obstacle to conversion is trust and the consumers’ confidence that their personal details are secure. 72 percent of mobile users say they’re “uncomfortable sharing personal data, putting the impetus on retailers to find ways to communicate how seriously they take information security.

Conversely, fraud prevention tools themselves can be responsible for abandoned shopping baskets. As consumers become impatient with redirects to 3rd party webpages, or being asked for further details as part of verification methods.

Retailers also must be aware that the impact of a cashless society will increasingly drive criminals to find alternative revenue streams. Card fraud is one such area that has increased; in 2014 card fraud losses across 19 European countries rose on average by 6%.

Solutions that reassure customers, offer retailers effective fraud protection and reduce the number of abandoned shopping baskets include:

Card Store and Tokenisation

Tokenisation is an excellent tool for protecting sensitive information, reducing damage caused by data breaches and deterring hackers. As more consumers become aware of this technology, many predict that tokenisation will become an industry benchmark of security.

Card store, using tokenisation, is also beneficial for conversions – it is the technology behind ‘one-click’. For returning customers payment processes can be simplified as card details are accessed via the token, negating the need to re-enter lengthy payment card numbers, customer address and so on. This impacts positively on conversions and builds trust, loyalty and a reputation for putting consumer data privacy first.

3D Secure

Increasingly customers are familiar with these additional data checks such as 3D Secure, and they can be a reassuring element of the payment process. However, they can be a source of friction, particularly with mobile payments, where multiply data entry leads to a poor user experience. This is when a tailored approach to 3D Secure is advantageous.

This might be by deploying alternative fraud prevention tools in regions where there is a low adoption rate of 3D Secure. Or by implementing Dynamic 3D Secure that allows merchants to turn on or off 3D Secure based on customer data and profiling, e.g. for mobile transactions where 3D Secure can be a conversion-breaker.


For eCommerce merchants having a clear idea of who your customer is, where they are located and what device they are using is an important factor in customer conversions. Positive profiling is a practical approach to ensuring a fast and effective checkout and payment process, rewarding loyal and trusted customers with a friction-free transaction whatever device they may be using.

Ultimately with the right online security and fraud protection in place, and with effective communications educating customers about identity card security online, many businesses can avoid the cost of handling cash and focus on taking digital payments instead.