The cost of payment

3 August 2020


We’ve read the news and seen the proclamations of a cashless society being thrust upon us because of the global pandemic. And part of this narrative at least is correct, cashless has been thrust upon us.

The war on cash has been going on for many years and the pandemic has opened up a new battleground for those pushing towards a world powered exclusively by electronic payments of one form or another. I am a firm believer in payment choice, for both retailers and consumers. Retailers should have the option of receiving payment however they want to accept it. Equally consumers should be able to pay how they want to.

The start of the drive to cashless because of COVID-19 can be attributed to the false “quote” from the World Health Organisation that spread almost as fast as the virus itself. The quote widely reported claimed that the use of cash could accelerate the spread of the virus and increase the infection rate. 

The WHO moved quickly to clarify the confusion, but much of the damage to the reputation of cash in this crisis was already done. There was no headline news to accompany the correct information either. There was however one quote I enjoyed that was said in response to the misinformation that was spread; Christine Tait-Burkard, an expert on infection and immunity at the Roslin Institute at the University of Edinburgh: the risk of coronavirus spreading on banknotes is small, “unless someone is using a banknote to sneeze in.”

A recent article published by the UK’s BBC spoke about what  business owners were calling “crippling hidden costs.” There were a couple of really quite troubling parts in the article. Customers making comments which were in all fairness probably light-hearted comments about “not paying tax.” While these comments are flippant and not meant with malice or any real suggestion of wrongdoing, they are still telling. 

Many consumers across the world are behind the idea of supporting smaller businesses that have struggled to survive through the pandemic. They understand the importance to both the economy and society as a whole of these local businesses. They are employers for many and provide important services for all. What many consumers have not registered is that their payment choices can have a real impact on these businesses and their ability to remain in business. 

The article featured multiple business owners talking about the fees they have to pay to; takeaway platform providers, card terminal providers, credit card companies and additional costs if a restaurant uses a delivery driver that is employed by the takeaway platform. The costs that are incurred by these restaurants have in some cases increased by over 500% through the combination of commission and service fees.

The preference for cash is a simple business decision. In the same way that consumers chose to use cash instead of credit cards because of the fees that they face, businesses are trying to encourage consumers to use cash to avoid using card payments to reduce the fees they need to pay.  

Consumers perceive cash transactions as the key to evading tax for businesses. This is an emerging theme throughout the article. The phrase “a lot of truth is said in jest” comes to mind. And in the minds of consumers the truth of the reason behind the preference for cash is tax evasion. That truth however is just perception. The impact of the narratives around cash and the truth about cash can be best served by a quote from Mark Twain, and for once, it’s not about death and exaggerations.

“A lie can travel halfway around the world while the truth is putting on its shoes.” It’s imperative that those of us who care about payment choice continue to dispel the myths about cash. We acknowledge that cash is not without cost, but these costs can be managed with automation of the processes. By acknowledging and tackling the costs that are associated with all payment options, we are able to continue to give consumers the choice of how they pay. .

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