Digital payment outages are costing high street retailers on average £255 for every hour they last, as nearly a quarter (24%) report having to turn customers away, delay or pause transactions or close due to not being able to serve a customer at all (22%).
That’s according to new research commissioned by the Post Office, with the UK retailers surveyed reporting an average of three payment disruptions in the last year, and the frequency of these events is predicted to grow.
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Nearly a third of UK adults (29%) admit they’ve been unable to pay at a checkout over the past year because a retailer didn’t accept a payment method they could use. Among those affected, over one in five (21%) said the retailer didn’t accept cash.
With the Government’s recent Be Ready campaign encouraging households to keep cash and essential supplies for emergencies, the Post Office has now issued its own guidance calling on retailers to consider reviewing their contingency plans and ensure they can continue accepting cash when digital payments are unavailable.
Contingency plan
The new research also showed that while 83% of businesses surveyed have a written or agreed contingency plan, 90% don’t include accepting cash as a back-up - despite 81% agreeing that keeping cash available for customers and emergencies is important.
Cash helps businesses remain operational during disruptions, with two-thirds (69%) being able to continue serving customers during digital payment outages. However, with only 32% of high street retailers surveyed saying they currently accept cash, the research reveals a potential resilience gap if digital payments fail.
Trading disruption
Ben Hunter Woollard, head of banking at the Post Office, said: “A payment outage can disrupt trading in seconds, resulting in customers being turned away and sales lost. Cash has helped many retailers continue trading during recent disruptions, but it’s rarely included in formal contingency plans.
“Retailers should also consider how they’ll keep serving customers if digital payments go down in emergencies.”
“With the Government encouraging households to keep cash available for emergencies, retailers should consider how they’ll keep serving customers if digital payments go down in emergencies. If cash usage is being encouraged, so should its acceptance.
“Our new guidance gives retailers practical steps to communicate clearly with customers and build a plan that works for their business.”
Important option
Although outages highlight gaps in acceptance, cash still remains an important everyday payment option for many consumers, supporting cash-only transactions that contribute £27bn to the UK economy.
While contactless cards are now the most commonly preferred payment method, cash is the number one choice for over a fifth (22%) of consumers and used by more than half of the nation (58%) for everyday purchases.
Only 28% of high street retailers say community needs and customer payment preferences influence their decisions about which payment methods they offer. Not considering how customers in the local community prefer to pay could mean losing sales.
New guidelines
To support business resilience, the Post Office has published new guidance to help retailers plan for payment disruptions, meet local customer needs and clearly communicate payment options.
Ed Woodall, chief executive of the Association of Convenience Stores, said: “Cash remains an important payment method for customers in convenience stores, with 99% of convenience retailers accepting cash.
”When people lose access to other payment methods through outages or issues with networks, cash is a crucial safety net that allows businesses to continue trading and serving their communities.”
Helen Dickinson, chief executive at British Retail Consortium, added: “Retailers accept a range of payment methods, guided by their customers’ needs. They recognise the importance of cash both as a budgeting tool for managing day-to-day spending and as a reliable option when digital payments are disrupted.
”While businesses remain free to decide which payment methods they accept, cash remains a viable option to support consumer choice and business resilience.”
The new guidelines can be found and downloaded here.
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