Small and medium-sized businesses in the hospitality and leisure sector are significantly more likely to be tied to cash transactions than SMEs in the retail sector, according to new research commissioned by the AA.
Cash accounts for approximately 28% of all transactions for hospitality SMEs with a quarter (25%) saying cash transactions represent more than half of their sales.
Comparatively, retail SMEs indicate 20.6% of all transactions are cash-based with only 10% citing cash accounting for more than half their sales.
A survey of over 1,000 SME owners and directors regarding the issues they experienced with card payment terminals in the past 12 months reveals possible reasons for reticence towards card acceptance, at a time when businesses operate in an increasingly cashless society.
A startling two thirds (67%) of SMEs in the hospitality sector have been affected by one or more issues with their card machine in the past 12 months.
High costs are also a significant concern. Hospitality SMEs were 50% more likely than retail SMEs to complain about high costs (42% vs 29%), while one in four in both sectors (26% and 24%) had experienced hidden costs and opaque pricing in the past year. Other common concerns among SMEs surveyed included malfunctioning machines (29%) and poor network coverage (30%).
David Searle, director of AA Financial Services commented: “Small businesses are in a tie when it comes to card payment. Increasingly the terminal is an essential piece of equipment that customers now expect, however a lack of choice, high costs, and surprise add-ons lead, understandably, to mistrust and a reluctance to invest. With the AA’s strong connection to the hospitality sector, it is particularly important that we are able to do what we can to help, particularly given the current economic climate.”