UK retailers are exploring alternative payment options and moving away from traditional cash payments due to relatively high costs, according to a new survey compiled by payments provider Sage Pay.
The company's research reveals that UK retailers now spend a whopping £17.8bn (almost $30bn) a year just to process cash payments. As a result, they are looking at cheaper alternatives, but it seems most of them are staying away from bitcoin.
This general trend is not new. The British Retail Consortium (BRC) has been keeping track of retail transactions for years and the volume of cash transactions has been going down.
Cash is still the most popular payment method and it accounts for one out of every two retail transactions carried out in the UK. However, in 2012 the use of cash in retail fell 10% and the drop is currently accelerating.
According to the survey, the average British retailer spends £3,638.57 handling cash payments every year.
That figure includes security, lost or stolen cash, and costs incurred due to counterfeits. More than half of all retailers surveyed by Sage Pay said that cash is the most troublesome payment method in terms of accounting issues.
It’s not just businesses, however; consumers prefer alternative payment methods too, hence retailers are trying to adjust and offer more choice.
The survey found that 36% of consumers are more likely to spend their money in a shop that offers more payment methods, while 31% of consumers are willing to take their business elsewhere if their preferred payment method is not supported.
Sage Pay Chief Executive Simon Black believes the industry is going through a payments revolution and the findings back up his claims, as more than a third of consumers and businesses believe Britain is becoming a cashless society, the Telegraph reports.
Black points out the retail landscape is changing, with an emphasis on omnichannel operations and a seamless consumer experience whether online, in physical stores or on mobile devices. Although the new model necessitates the use of digital wallets, prepaid cards and similar technologies, Black does not see much room for cryptocurrencies.
Cryptocurrencies were dismissed as a fad by 61% of businesses surveyed by Sage Pay. Two thirds of consumers awarded it the lowest possible mark as a payment method and just 1% of consumers admitted to using bitcoin in the past month.
To put the figures in context, a recent survey carried out by communications agency Clarity found that 57% of online shoppers in Britain are familiar with bitcoin. One in five said they experimented with it, but only one in five said they would consider using it in the future.
Black argues that many businesses are using bitcoin as nothing more than a PR gimmick:
On a more positive note for the digital currency, the survey also revealed that 29% of surveyed merchants view bitcoin as an important technology that could have an impact on future payments systems.
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