Cashless is king

The age-old phrase cash is king may still hold true from a balance sheet perspective, but in terms of physical currency, its use is on an ever declining trajectory.

According to the latest findings from payment platform Flyt, formerly Flypay, 44% of all customer payments are currently taken as cashless, on average, across the sector.

This is expected to rise considerably in the future; to 62% by 2020 and 73% by 2025, on average.

Almost one in ten (7%) of the IT leaders in the sector expect 100% of their company’s customer payments to be taken as cashless by 2025.

Meanwhile, the latest Bank of England data shows cash in circulation is growing at its slowest rate in 55 years.

Official figures for February showed that the annual growth of notes and coins in circulation dropped to 0.2%, its lowest level since 1963. The slowdown was even sharper than in 1972, the year after decimalisation, when cash use grew by 0.3%.

Such figures make it less surprising that operators like BrewDog, known for their self-styled punk attitude to business, would seek to rip up bank notes in favour of contactless payments.

A pioneer of the trend in the sector has been Tossed, which has rolled out a cashless model across its estate, allowing customers to order via tablets rather than manned tills.

Finance director Neil Sebba said the potential problems with the model, such as reduced interaction with customers, were mitigated by the fact the system freed up staff to help out customers in other ways, while streamlining the ordering process.

Sebba agrees the trend will continue to gain traction, telling MCA: “We think it’s the future and have invested heavily in converting the Tossed estate to deliver this.”

Nor does he see it as a London-centric issue, adding: “As to geography, I don’t see that as a point of concern – we operate cashless at Welcome Break already.”

Others have introduced a gradual solution, with Wahaca using QuickPay to speed up bill payments,

Co-founder Mark Selby said after first piloting the new technology last year with Flypay, the group was increasingly moving towards being as cashless as possible.

“For us it’s all about making customer journey that much better”, he said. ”Our focus is on speeding up the journey while not taking away their enjoyment.”

For some smaller operators going cashless has key administrative savings, freeing up staff to give better value for customers.

Alex Wreatham, founder of the three-strong Charlotte’s restaurant group, said: “A big thing for us was looking at cost savings. With the minimum wage gong up and rates rising, we didn’t want to compromise on ingredients. We looked at what we could do reduce costs, and we were spending three hours a day counting takings.

“With no cash you just walk over to the main terminal and hit end of day and then you can have a beer which is quite a big win.

“It’s a genuine benefit for guests watching our incidental costs and allowing us to deliver the best value.”

What challenges are there for operators in introducing a cashless model?

According to Flyt’s research, 97% of survey respondents have faced, or are likely to face challenges when installing new user-facing payment processing solutions.

Respondents most frequently cite cost (61%) as a main challenge, followed by the time it takes to install new solutions (54%); a lack of staff with the skills needed to do installations (40%); and legacy hardware being difficult to integrate with (37%).

Flyt said a lack of resources to make a change was one of the challenges operators are most likely to face when modernising payment processing services include (67%).

Employee resistance to modernisation is also a potential stumbling black for 61%, while smaller companies and start-ups are able to adapt to new technology more quickly (63%).

Tom Weaver, chief executive of Flyt, added: “Many brands are now really seeing the benefit of moving towards cashless, not only for operational purposes but in response to the ever-increasing customer demand for it.

”Our customers have already seen huge benefits since adopting cashless methods, with thousands of guests preferring to use apps to no longer wait for the bill, and to pay on an app and go. It is fantastic to see operators responding to their guests needs and embracing technology within their operations.

“Our research clearly shows the importance of getting on the cashless path now in order to not be left behind.”