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How SMEs can afford cashless economy tech

The cashless economy is going from strength to strength, but a staggering number of SMEs are missing out because they are not investing in the technology. Alternative finance can help them cash in.

Want evidence that coins and notes will soon be obsolete? How about this: the supermarket chain Costcutter is rolling out Fingopay at its stores in London. Fingopay is a biometric system that uses the vein pattern in your fingertips to pay for your shopping. It works by linking your debit or credit card to your finger pattern.

If that sounds a bit too sci-fi, more tangible are the figures from the UK Card Association that show that over three quarters of retail sales in 2016 were made using a credit or debit card. Add to this research from Moneymailme that reveals that almost half of 18-25 year-olds think that cash will be a thing of the past within 20 years.

So it makes sense to be geared up for the cashless economy. However, an eye-watering amount of SMEs are dragging their feet – over half a million don’t accept card payment, let alone offer Fingopay. According to Expert Market, on average, this lack of investment is costing every small business over £23,000 in sales a year.

What’s stopping them? Well, cost has to be a major factor. Upgrading payment systems has a price tag and, given the uncertain market conditions and the numerous other drains on capital, from costs relating to cybersecurity and pension auto-enrolment to GDPR compliance and late payment, it is easy to understand why spending on card payment capacity might not be a priority.

But SMEs can’t afford to miss out. This is where alternative finance can help. For example, raising funds through peer-to-peer lending or using invoice finance to tackle late payment can help relieve the pressure on cashflow, which makes affording investment more straightforward.

Market dynamics will always shift and the change in the way we pay for things is part of this ongoing evolution. It’s important for SMEs to keep pace – their survival depends on it – and to do that they need to be aware of all the funding solutions available to them, including alternative finance.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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