They're still coining it in

By JENNY LITTLE
Updated:

 

CASH is still king for business with smaller firms handling £28bn in coins and notes every month.

Dale Pollard

Despite claims that cash is losing out to electronic payments, many small and medium-sized companies still favour cash payments because they are cheap to process and keep businesses in good financial health.

Russell Carter of Alliance & Leicester Commercial Bank, which came up with the findings, says: 'Cash is chea- per and easier for firms to accept than cheques or credit and debit card payments and it is also helps them in terms of managing cashflow.'

The Small Business Research Trust has found that 59% of small companies still make payments by cheque. But almost ten % deal in banknotes when they are being paid by customers for goods and services.

This reflects the fact that certain industries depend almost entirely on ready cash - hospitality, retailers and building-related businesses largely still have money flowing through their tills.

Dale Pollard, 47, from York, runs seven pubs in Yorkshire and he does not see any decline in cash use in his establishments. 'We don't receive any payments through credit cards,' he says. 'Pubs where the food trade is important see more card transactions, but I think cash will remain dominant for the foreseeable future.'

It is estimated that the average person carries £21 in notes and coins with them every day.

Carter believes that as long as consumers continue to favour cash for day-to-day transactions, the businesses they use will still process large sums and, more to the point, will need the facility to do so at an affordable price through the banking system.

He says: 'I can't imagine the day when I buy a pint or pay for my paper with a credit card. The continued use of cash by businesses is driven by consumer behaviour.'

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