Is it time your coffee shop went cashless?
One London coffee shop has joined a growing number of UK stores and service outlets that are forgoing cash payments in favour of a completely card-only payment system.
But should your coffee shop follow suit? Is there a market for a cashless coffee shop in the UK?
Statistics from the experts at e-payment specialists, PPRO Group found that 59.4% of the British public believe that the UK is quickly moving towards a completely cashless society — and now the completely cashless coffee shop could quickly become the norm.
Millennials shun cash in favour of card payments
The same research from the group also found that a third of all surveyed stated they never use cash anymore, with that figure rising significantly to the millennial demographic to 51%.
It seems that the cashless coffee shop is something that in theory is completely viable, which has been backed up by Browns of Brockley, who chose to ban cash in favour of card payments.
The trailblazing independent coffee shop that has removed all physical cash is run by Ross Brown, who had the idea to deal exclusively with plastic after visiting Sweden.
“While I was away we visited a number of chains, pop-up restaurants, and other places that might require cash payment in the UK, but we didn’t need to handle cash in any of them in Sweden – I didn’t withdraw money once,” he told the Mirror.
The introduction of contactless payments and the ability to pay with your mobile device with systems such as Android Pay, Apple Pay and Samsung Pay, it’s now much more convenient to avoid the cash machine in favour of your card or mobile.
Facts and figures
- 38 million contactless card transactions were made in 2016
- £288 million was spent through mobile contactless payments in 2016
- 2016 saw an increase in mobile payments by 247% on the previous year
- Pubs, bars and restaurants accounted for 20% of all mobile payments
- Meal deal hotspots such as supermarkets, bakeries and coffee shops made 54% of all mobile payments
- ATM’s have seen a usage decrease of 44%
But it’s not just the consumer that benefits, Ross has seen a time-windfall that is s welcome surprise to himself and his staff as the daily ‘cashing up’ process is simply eradicated.
“Around 70% of our customers today pay by card, yet we spend up to five hours a week cashing up, counting the float and banking the cash.
“On top of this time-consuming task, any discrepancies have to be cleared with my team of 12 – and then we have to deposit it at the bank, which costs more cash. It’s such a faff.”
When we first made the switch, our customers didn’t even pick up on it – card had already become the norm
So less faff, more directly deposited digital cash for Browns of Brockley, but could it work everywhere?
Of course, it’s worth actually asking your customer base if they are open to the idea, which is exactly what Ross did before dropping notes and coins for good.
“We spoke to staff, consulted regular customers, and met with our merchant supplier to make sure the move was feasible and in our customer’s best interests. The feedback was incredibly positive – so we took the leap.”
Customer card payment transition
Since opening in 2011, the coffee shop initially saw cash transactions making up 80% of payments, the remainder being card transactions.
But by January of 2017, the tables had turned and now 70% of all payments were made by card, a lot owing to the updates in banking technology to allow for quick, seamless card payments via contactless and digital transfer.
“When we first made the switch, our customers didn’t even pick up on it – card had already become the norm,” Ross said.
But even though the trends showed an increase of spending via card, Ross admitted that it wasn’t without some complaints: “Admittedly we did receive one or two complaints at the time of the switchover, but that’s what happens with change. We manage 2,000 fuss-free transactions a week – which I’d say is a positive amount.
“If anything, I’d say the switch to cashless has improved our efficiency and even given our profits a welcome boost.
“Eventually, we want to go 100% contactless as it’s quicker for all parties. But we do understand that our customers, and ourselves, are not yet ready for a completely contactless café.”
So, if this micro-test of the cashless coffee shop is anything to go by, it has so far been a resounding success.
Just how long until your shop jumps aboard?
Brits move to divorce themselves from cash
According to Payments UK, an approximate 15.4 billion cash payments were made compared to 11.6 billion on a debit card in the UK in 2016.
But that gap is closing at a significant rate due to the improvements in technology and accessibility to both card and contactless card payments in just about every business within the British Isles.
Debit card payments are expected to overtake cash payments in 2018, that is almost three years earlier than projected and could possibly provide a business edge for your coffee shop or cafe.