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How SMEs can afford the switch to a cashless society

News that the cash infrastructure in the UK is in danger of disappearing is a warning to small businesses. How people are spending their money is changing rapidly and it is vital that small businesses adapt. Alternative finance can help these firms afford the costs of this evolution.

According to a new report, cash could fall to as little as 10% of all payments in the next 15 years. While the Access to Cash Review focuses on the impact on cash-only consumers (around 8 million could be left struggling to cope), it also has a very important message for the country’s businesses.

Given the pace at which payment habits are changing – notes and coins were overtaken by debit cards in 2018 as the most popular form of payment in the UK – it is vital that small businesses have the technology to embrace this transition.

Naturally, you’d be hard pressed to find a business that doesn’t accept debit and credit card payments, but in today’s marketplace this isn’t enough. The popularity of cashless and mobile payments is growing rapidly and the use of these technologies will only accelerate as people become more confident with them. And then there’s biometric payment technology such as Fingopay, which lets you pay using your finger. There’s no need for cash, cards or mobile devices.

For businesses, the need to adapt is a purely sales-driven reality. With less cash being used, if a business wants to keep selling, it needs to give consumers the means to keep spending. However, while large firms have the resources to manage this move, which involves new payment technology and the cybersecurity infrastructure that needs to accompany it, the costs are a significant barrier   for small businesses.

This is where alternative finance can help.

As a result of prolonged caution from traditional lenders, non-bank services such as invoice finance, asset finance, peer-to-peer lending and crowdfunding, are providing small business owners with an alternative means of accessing capital for essential investment, such as in new payment technology and enhanced cybersecurity.

This is how a Sussex small business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the money to buy new equipment.

It is clear that how we pay for goods and services is changing and that SMEs cannot afford to miss out on this cashless-society spending. For small business owners to successfully take this step, they need to be aware of all the finance options available to them, including alternative finance.

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

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