Member Article
Card payments driving growth, say ‘Cashless Street’ retailers
Businesses on the Manchester street that went cashless a year ago in a social experiment are thriving thanks to the public’s increased appetite for card payments.
Card payments have now passed the ‘tipping point’, overtaking the use of cash in daily life, according to new figures released by industry body The Payments Council.
And it’s the spike in lower value card transactions, particularly on contactless, that has been most noticeable over the past 12 months.
The independent traders of Manchester’s Beech Road shot to the forefront of the cash v cards debate last year when they joined forces with card payments company Handepay to stage a social experiment that tested public reaction to going completely note and coin free.
The UK’s first ever cashless street includes a deli, bakery, newsagent and cafes - exactly the type of high street businesses that have suffered most during recent years.
One year on and the Beech Road ‘cashless street’ retailers have all recognised a further shift towards cards from their customers - who are spending more as a result of this convenient way to pay.
Colin Richardson, owner of Richardsons bakery on the road, comments: “Turnover has risen seven per cent in the past year and that’s down to the number of customers paying by card.
“Card payments have doubled in the past year in our shop - from people paying for birthday cakes to workers coming in for their lunch. We also saw an increase since we dropped the minimum spend on the card machine. Contactless payments account for just under half of our card transactions.
“Public habits have definitely changed and the value of card payments we take is only going to keep rising.”
Across the road at deli Epicerie Ludo, owner Ludovic Piot has noticed many more customers making lower value payments on cards instead of cash. In fact, the number of card transactions in his shop has risen to more than 23,000 in the past 12 months - a jump of three per cent.
Card payments now make up 61 per cent of the total income as more and more customers opt to go cashless.
Ludovic comments: “Card payments and contactless are all part of the service. You have to open the door, give the customer every option to pay.
“Our biggest rise as a business has come from our bread and cheese, traditionally lower value items that people would have paid for in cash previously. However, when the customer knows they can pay by card, the amount they spend often goes up.
“We still officially have a minimum spend of £5 on card, but we’re much more flexible about this now than we used to be even a year ago. We rarely insist on it anymore as we like to encourage more people to use their cards - we really think it’s good for business and the numbers back that up.”
Even the newsagent, where locals pop in for a paper, a pint of milk and a bar of chocolate, are now processing two per cent more card payments than a year ago, but have seen the value of these transactions increase by six per cent.
Owner Craig Etchell, of C & W Etchells, comments: “We’ve seen the value of card transactions year-on-year increase by six per cent. As a result, we are considering a reduction of our minimum spend and looking at contactless options. People are turning to cards because they simply find it the most convenient way to pay.
“It’s something we pay great attention to because the payment landscape is changing all the time and we need to make sure we’re providing the best options for our customers.”
Handepay believe that the success of the Beech Road retailers in growing their businesses as a result of card payments should serve as an example to other independent businesses of the need to adapt to modern lifestyles.
Mark Latham, product and innovation director of Handepay, says: “The cashless street day was all about highlighting the fact that those independent businesses who do take card payments are avoiding money walking out the door.
“Contactless payments in particular are driving the cashless revolution and with the spending limit rising to £30 from September 2015 and the imminent launch of Apple Pay into the UK, this will only move at a quicker rate. The future for the local high street is in making it as easy as possible for customers to continue to shop there.”
This was posted in Bdaily's Members' News section by Handepay .