Cash Supports Local Commerce

Cash is key to the survival of small businesses as card fees force tough decisions on whether to forfeit profits or raise prices and risk losing customers, with US businesses using discounts to incentivise cash payments and UK campaigners warning the loss of cash access is ‘hollowing out high streets’.

A recent Wall Street Journal article examined ‘swipe fees’ levied on card transactions—often invisible to customers but a growing problem for business owners—and found more and more businesses are concluding the best compromise to ensure payment choice while sustaining their profit margin is to offer discounts for customers paying cash.

UK businesses face similar problems, compounded by shrinking cash access in rural areas caused by banks closing branches and ATMs. One village shop in Kirkoswold, Cumbria was saved in 2010 by a community buyout, but is now facing a fresh challenge in the form of ‘rising card payments, and the financial burden they pose.’

The shop does display a sign asking people who are spending less than £2 ($2.50) to use cash if possible, but say they don’t want to turn anyone away if they insist on using card since ‘that would be counterproductive to our purpose as a community service.’ They are, however, keen to ‘raise awareness of the hidden costs.’

i News has spoken to other small businesses across Britain who say they struggle with card providers taking a share of sales, and add that many cashless payments introduce a waiting period between a sale being made and them receiving the money, whereas cash payments are instantaneous.

The UK’s Payment Choice Alliance—a group calling for laws requiring businesses to take cash and for banks to improve access to it—say the government ‘could come down harder on banks in terms of the services they offer’ and make it easier for people to withdraw and use cash at local businesses who will most benefit from it.