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.
For one trading day, they encouraged the use of card payments only - and the results were striking as businesses saw an increase in turnover of 22 per cent.
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.
The event also highlighted the fact that half of independent businesses still didn’t accept card payments - meaning they were missing out on millions of pounds worth of business as consumer spending habits changed.
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.
“We came very late to card payments and in hindsight should probably have got a machine in sooner. 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 following the Cashless Street experiment.
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 as last year’s figures have proven the demand. Cash back transactions only account for about 40 per cent of card payments each month, which goes to show that people are turning to card, not just for cashback but 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, in order to keep them coming back.”
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.”
DISCLAIMER: The statements, opinions, views and advice expressed in this article are those of the author/organisation and not of ENTIRELY. This article should represent information correct at the time of publication however whilst every care has been taken to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. ENTIRELY will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within this article or any information accessed through this site. The content of any organisations websites which you link to from ENTIRELY are entirely out of the control of ENTIRELY, and you proceed at your own risk. These links are provided purely for your convenience and do not imply any endorsement of or association with any products, services, content, information or materials offered by or accessible to you at the organisations site.