Speciality Food April 2024

5 specialityfoodmagazine.com years!” The British Retail Consortium (BRC) backs British businesses, such as Paula’s, in their concerns. Hannah Regan, the consortium’s payments policy advisor, told Speciality Food , “Ineffective competition in the payments market has led to high fees across the board. Retailers paid £1.26 billion to process card transactions in 2022. This includes high cross border interchange fees, as well as high scheme and processing fees, all of which have risen significantly in recent years.” Hannah says the BRC is calling on the PSR (Payment Systems Regulator) to “implement meaningful reforms to increase competition and reduce costs in the payment market. Furthermore, the Treasury should conduct a full review of interchange fees to examine if they are fit for purpose in the UKmarket.” Mark Kacary of The Norfolk Deli said card payments are the inevitable future of retail. “When we used to bank cash as a business we were charged by the bank every time. Possibly less than card charges, but the difference was not that great. Now that the banks have T here has beenmuch chatter over the past fewmonths on social media around the use of cash versus card in independent retail. As smaller shops struggle to keep the lights on in the face of rising costs across the board, some have pleaded with customers to use ‘real’ money at the counter, in a bid to avoid card charges. However, with banks shutting at a rate of knots, and some consumers still wary of handling money, are these retailers just holding back an inevitable tide? The answer is tricky...at the moment. While cashmachine network operator, Link, reveals £81 billion was withdrawn fromATMs in 2023 (a huge sum), its statistics also show this is a decrease from£83 billion in the previous year. A notable decline. The Cash Supply Alliance, set up to promote cash as a continued valid payment option, believes it’s imperative shoppers are given a choice, with steering groupmember Nigel Constable saying it is critical deposit and withdrawal facilities are maintained. “For many it is also about the freedom to use cash, for personal budgeting, or as a desire to avoid card data being captured andmonetised.” In the USA, the Payment Choice Act was passed in 2022, making it illegal for businesses to refuse cash payments valued at under $2,000. Greg Strolenberg of Lavenham Butchers would welcome such a move in the UK, and his business is just one independent that’s been closed what are our options for being a business relying purely on cash transactions?” Mark conceded that if most transactions are sub-£5, card costs could create pain. But then there is the argument in fine food retail, he continued, that if people spend with card, they will generally buy more. Businesses just need to, he said, factor the cost of using cardmachines into their prices. East Street Deli in Dorset has only ever accepted card payments, and owner SimonWarren said he hasn’t found any negative affects being cashless. But he does agree there should be standard payment terms across the board. “We were using one terminal and the money from American Express would take several days. Now it happens in one lump payment on the same day and goes through the next morning.” Key, he said, is regularly checking rates, and perhaps even joining forces with neighbouring businesses to ensure you’re all accessing the best deals. “We monitor rates quite regularly. It’s something I’ve always got my eye on. You could be in trouble if you haven’t been watching them. In this street half a dozen of us are all on the same payment supplier and we talk quite closely about what they are doing!” “It’s been interesting to see the cash versus card debate in a post- Covidmoment,” said Edward Berry of The Flying Fork. “It is clear that, of all consumers, Millennials seemmost keen to give up cash altogether and pay directly with a card –withmany ready to abandon coins and notes in a completely cashless society. However, whilst card usage has increased, so do the costs associated with accepting these payments." On the other side of the coin, he said, shoppers can become frustrated with cash only businesses “even taking their custom to card accepting competitors”. “I’m glad to say that it has become rarer to be forced to pay a minimum value transaction to use a card. While I understand the rationale, particularly any fixed per transaction costs to the retailer, it displays a lack of competition. If you hand everything to the chain who can afford it, your days may be numbered. Howmany transactions are cancelled by customers who do not appreciate being forced to buy unnecessary items?" Cash, Edward reflected, is not free. “Time spent visiting the bank is time paid. You also need to factor in forged notes, petty theft and errors. Some business owners have found that going to a cashless model has been cheaper.” The big cash or card debate asking customers to use cash where they can. “For me, it's more about not being pushed into a society that we don’t want,” Greg said. “People seem to be walking into this blindfolded as if it's a good thing. We want to take cash. We pay our suppliers cash. Why should we give to banks and cardmachines for doing nothing but eating away at our profits? All we get here is bills, and it’s frightening. You can’t make a living!” Paula Bui, of Fusion Chocolate, agrees. “It’s hard,” she said. “I can understand why post-Covid everyone ended up using cards, but from a small business perspective, it’s another cost we have to factor into pricing. For me, one of my smallest products only costs £2.50, but if 2.5% of that goes on card processing fees, it’s quite a chunk to miss out on.” More needs to be done, Paula added, to not only regulate card charges, but to ‘push on the payment times’. “One of my systems can take three to four days before money pops through and that is frustrating, certainly as I’ve been with them for the best part of three Is it time to ditch coins in favour of all-card sales? Or does cash still have a big part to play in fine food retail? Speciality Food reports...