Cash remains crucial for convenience stores, providing financial flexibility for consumers and a fallback when card payment facilities aren’t available. Almost half of transactions in convenience are conducted by cash, and over 99% of the UK’s 50,387 stores accept it.
The ACS (Association of Convenience Stores) has given evidence to a Treasury Committee on the acceptance of cash and whether current regulations are fit for purpose.
Speaking during the session, ACS chief executive, James Lowman (pictured), said: “The cost-of-living crisis saw an increase in the use of cash, particularly as people used that as a way of managing cashflow and finances. We see cash as being a very important part of a number of payment methods that consumers are going to be using for a long period of time.”
Lowman discussed the operational costs of card transactions, comparing them to the handling costs of cash. Where convenience retailers are required to accept cash, they may face increased operational costs regarding securing, transporting, and handling cash, but card payments also come with operational costs, especially if they are built up of many small transactions.
He went on to highlight the importance of banking services, particularly in secondary and tertiary areas where customers may be more likely to use a convenience store to access their money.
ACS submitted evidence prior to the session, highlighting the vital role that convenience stores play in ensuring cash access within their communities, especially where traditional banking services are absent. During the CrowdStrike outage, many consumers struggled to pay for their items as card transactions were unavailable in some retail businesses. The availability of cash as an alternative showed how it is vital to retain flexibility and a mix of payment methods.
Lowman added: “If we’re serious about keeping these services available to local communities, part of that has to be allowing retailers to accept payment for that on a viable economic basis, but retailers are reporting increasing card costs that are inadequately monitored and regulated. The Payment Systems Regulator must do more to ensure that transaction and processing fees aren’t allowed to spiral out of control.”
You can read the ACS submission here.
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