Small businesses missing out on thousands
New research commissioned by Visa has revealed that Irish retailers' preference for cash transactions could be costing small businesses up to €6,000 per year in handling costs.
27 October 2017 | 0
New research commissioned by Visa has revealed that Irish small businesses are at the risk of falling behind international peers in their adoption of digital payments technology. The research shows that Irish SMEs could individually save between €5,000 and €6,000 per year on cash handling costs by increasing the amount of electronic payments they process.
According to Visa, Irish consumers now pay for goods and services by card far more than by cash. Shoppers spend an average of €10,465 on cards per capita each year, compared to €5,388 in cash.
One in three of all face-to-face Visa transactions in Ireland are Contactless payments.
Despite this, there is a perception among some parts of the Irish retail community that cash is less expensive for businesses to process. To explore this, Visa commissioned research to investigate the hidden costs of cash in terms of back office and security costs and better understand how they compare to card transactions. The research established that for the businesses involved in the study it is cheaper to accept €1 as a card payment rather than cash, with cash handling costing 2.5 cents per euro of sales compared to 1.6 cents for a card transaction.
The research showed that time businesses spent counting cash transactions was on average 94 minutes a day, versus totalling card transactions which was 28 minutes per day. These figures reflect the efficiencies that cards can deliver for a business. As a result, business owners could save anywhere between €5,000 and €6,000 per year on cash handling costs.
“The Irish retail sector is at a crossroads as consumers increasingly choose electronic payments over cash, opting for convenient and secure digital transactions instead,” said Philip Konopik, Visa’s country manager for Ireland. “We believe this trend is set to accelerate due to new innovations in contactless payments, particularly around mobile technology. The scale of change over the next ten years will be even more dynamic with developments in areas like biometrics and the Internet of Things.
“Despite consumers embracing electronic payments, Irish retailers who are unable to accept new payment methods risk missing out on sales and incurring excessive costs,” Konopik added.