Card payment services are best for business, 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 payment services.

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 payment services provider 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%.

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 the 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 Richardson's 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 using their card payment services 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. Cashback transactions only account for about 40% 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 payment services 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.”

To find out more about Handepay’s Cashless Street visit:

Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

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