This month’s global IT outage, which disrupted electronic payment systems and led to queues at ATMs and ‘cash only’ signs being brought out of storage by forecourt operators, highlighted the perils of moving to a cashless society.
For more than a decade, but especially since the Covid-era warnings about transferring germs through hand contact, the UK has been transitioning to a retail economy where digital payments have gone from commonplace to the norm. Some retailers such as high street coffee bars and delis even refuse cash.
Card payment poses less of a security risk and is cheaper to process. However, although cash use is in decline across much of the sector, and accounts for only a small proportion of transactions, several forecourt operators contacted this week by Forecourt Trader believe that getting rid of cash completely would be a bad idea.
It is a view echoed by cash handling equipment supplier Volumatic, which cautions this week that forecourts that rule out cash do so at their peril.
“Cash should not be seen as the enemy and this latest IT outage proves that cash is still a vital method of payment and is always resilient,” said Mike Severs, sales & marketing director at Volumatic. “It also proves that moving towards a fully digital payment system could be disastrous for businesses.”
And it is not just the thought of sales grinding to a halt if there were to be a repeat of the IT outage, which arose from a faulty software update by cyber security company CrowdStrike. Millions of devices were said to have been affected with Microsoft payment and back-office computer systems unable to turn on properly afterwards, and Morrisons and Sainsbury’s among those prevented from taking fuel card payments at their supermarket sites.
The Pricewatch Group’s general manager Tom Buckley said he would be concerned that refusing cash payments would put off some customers from using its 10 Sussex forecourts.
“We honestly don’t mind cash,” he said. “It’s vital to some older customers who haven’t embraced digital payments – people like my dad, aged 75, wouldn’t come to us if we stopped it, and I think we would lose a fair amount of business, although I never have cash on me.”
Currently cash accounts for 10-15% of the business’s transactions, and Tom has taken steps to address the biggest problem to the business this presents of theft. Pricewatch Group now uses Volumatic safes and has regular collections from Loomis, which he says have “reduced losses significantly”.
“If we stopped cash, we would have to close when the technology failed. We will be taking cash for a fair while longer. The key is taking both in my opinion,” he added.
Guy White, managing director at Laurels Service Station in Horncastle, Lincolnshire, says that despite bank cash handling charges only likely to increase, he has heard by as much as £1.50 per £100 deposited for small businesses, forecourt operators have a moral obligation to take cash. “We need cash, especially at the moment due to some customers having limited funds and spending daily rather than maxing their cards,” he said.
Some 10-15% of the Shell forecourt’s sales are with cash, and the business has a free to use cash machine on site as an added service. “However, handling cash is a bit of a pain and does cost the business,” admitted Guy who is now considering signing up to a two day a week cash delivery, and collection service, which he believes will “save quite a lot of money”.
He added: “Cash is still a very important part of our business, and I personally would love to see cash continue.”
David Charman, managing director at Parkfoot Garage in West Malling, Kent, agrees that “cash is not the enemy”.
He maintains that by using a pouch system to verify, count and manage cash, the process is “very easy”.
He added: “Of course it is in a steady decline but will always be with us I believe. We would never discourage any means of payment only invest to ensure that the customer journey is fast and accurate.”
Oliver Blake of Oasis Garage at Long Riston, near Hull, has a different view, noting that his business has long urged customers to use cards, and that the recent global technology breakdown has made little difference to his attitude. “We at Oasis do encourage digital payments to help reduce cash handling fees,” he said.
“All the staff during a transaction will ask once scanning is complete, ‘is that everything?’, followed by ‘paying by card?’. That is the easiest and best way to do this.”
Regarding safeguarding against another IT outage, Oliver says that the business now checks software upgrades on test equipment before applying it to the site computers. “This way any issues should be picked up before it’s sent to the site’s PCs,” he added.
Despite being affected by the outage for an hour, Daire Ryan joint owner of Centra A1 Banbridge in Northern Ireland said he would be pleased if the 10% of cash transactions at his Northern Irish site reduced. “Overall, I prefer customers to use cards, but we’re obviously happy to accept cash too,” he said.
Volumatic is adamant that it is vital for businesses to take cash, alongside card payment. “Volumatic is a pro-payment choice business and while we understand that most people enjoy the convenience of tapping a card or a phone to make a payment, when it doesn’t work, consumers are left scrambling and unable to access their own money,” said Severs.
“Businesses must understand that they need to offer another way to pay to protect themselves and their customers, and with cash handling technology, accepting cash is both easy and effortless.”
He points to research from the British Retail Consortium last year that showed that there has been a return to the pre-pandemic trend of smaller but more frequent cash payments.
“The public are realising that cash is more important than ever, so businesses must too,” he said.
“While it remains to be seen what new legislation is brought in by our new Prime Minister, it is widely felt now that the UK should introduce a new law ensuring that cash can always be used to protect us, not only from big tech failures and external threats but also big-brother type surveillance, seeing as cash also has the benefit of not requiring personal data to be shared.”
