{"id":43275,"date":"2019-05-17T16:36:23","date_gmt":"2019-05-17T15:36:23","guid":{"rendered":"https:\/\/www.aurigaspa.com\/?p=43275"},"modified":"2019-09-23T08:12:52","modified_gmt":"2019-09-23T07:12:52","slug":"role-of-cash","status":"publish","type":"post","link":"https:\/\/www.aurigaspa.com\/en\/news-and-media\/blog-eng\/role-of-cash\/","title":{"rendered":"The role of cash and bank branches in keeping small businesses thriving"},"content":{"rendered":"<p>Business Secretary Greg Clark\u2019s recent inaugural Business Council meeting for Small Businesses highlighted that small companies represent an <a href=\"https:\/\/www.gov.uk\/government\/news\/pm-business-council-for-small-businesses-28-march-2019\" target=\"_blank\" rel=\"noopener noreferrer\">overwhelming majority<\/a> of the businesses in the UK.<\/p>\n<p>Given how important these businesses are for our economy, it\u2019s clear more should be done to enable them to grow. <strong>Access to cash and bank branches is vital<\/strong> in enabling small businesses to thrive, the main three reasons being consumer demand, costs associated with card payment facilities and the services bank branches offer.<\/p>\n<p>The <a href=\"https:\/\/www.fsb.org.uk\/standing-up-for-you\/our-campaigns\/saveourcashpoints\" target=\"_blank\" rel=\"noopener noreferrer\">FSB<\/a> and Which? note that <strong>over 2,500 cashpoints were lost<\/strong> in the second half of 2018 alone, and this shrinking of bank branch and cashpoint networks has been hitting small businesses hard.<\/p>\n<p>It is not rare to hear of entire communities running out of cash, causing inconvenience for SMEs in the day-to-day running of their businesses as well as disruption to sales. If customers don\u2019t have cash at one of the <a href=\"https:\/\/squareup.com\/gb\/townsquare\/cashless\" target=\"_blank\" rel=\"noopener noreferrer\">3 million small businesses that do not accept card payments<\/a>, the sale is lost.<\/p>\n<h2>Why is cash and branch access so important for small businesses?<\/h2>\n<h3>Consumer demand for cash<\/h3>\n<p>A lot of consumers still like to pay with cash or rely on cash to make payments, for example poorer people that find it easier to stay in budget using cash, tradespeople who are often paid in cash, and people without a bank account.<\/p>\n<p>In fact according to UK Finance\u2019s <a href=\"https:\/\/www.ukfinance.org.uk\/system\/files\/Summary-UK-Payment-Markets-2018.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">2018 UK Payment Markets report<\/a>, <strong>cash payments remain one of the most widely used payment methods<\/strong> in the UK, meaning small businesses need to meet this demand or risk losing out. Bank branches are also important, as business owners need somewhere nearby to pay cash into regularly.<\/p>\n<h3>The costs involved with accepting and processing card payment<\/h3>\n<p>Another reason access to cash is so important to sustaining small businesses such as newsagents and corner shops and helping them thrive is because card <strong>infrastructure can be costly<\/strong>.<\/p>\n<p>As noted by <a href=\"https:\/\/smallbusiness.co.uk\/five-tips-to-get-started-taking-card-payments-2442762\/\" target=\"_blank\" rel=\"noopener noreferrer\">Handepay and Small Business<\/a>, accepting card payments means having to account for processing fees including basic rates for individual transaction processing, premium charges for processing transactions above the basic rate and fees for payment authorisation too.<\/p>\n<p>They also note the average business will pay \u00a31 a day to have a card terminal, which might not seem like much, but adds up and eats into what may already be thin profit margins, so <strong>cash can be far more economical<\/strong>.<\/p>\n<h3>The support SMEs need in order to thrive<\/h3>\n<p>Additionally, bank branches are vital to small businesses given that they provide access to a variety of financial services, from cash depositing to loans support and even financial advice. And as emphasised by <a href=\"https:\/\/www.ft.com\/content\/d5efbbe4-440b-11e9-a965-23d669740bfb\" target=\"_blank\" rel=\"noopener noreferrer\">FSB chairman Mike Cherry<\/a>, it is in banks\u2019 interests to offer such services, given there are so many small businesses that want current accounts alongside accessibility to services.<\/p>\n<p>However, <strong>many small businesses are unable to access this support<\/strong> during normal banking hours, meaning they might have to close business early and lose out on sales. On top of that, if they are based in a rural or remote location they may not have a branch very close to them, causing them to close business for longer periods and budget for costs of travel such as ferries too.<\/p>\n<p>Rural-based business owners may also suffer more limited access to online banking services, making physical banking touchpoints all the most crucial to the running of their activities.<\/p>\n<h2>So what can be done and how can technology help?<\/h2>\n<p><span style=\"color: #df0000;\"><strong>Challenge<\/strong><\/span>: Connectivity and online banking can be more difficult to access in rural locations<br \/>\n<span style=\"color: #df0000;\"><strong>Solution<\/strong><\/span>: Banking technology at branches<\/p>\n<p>While a lot of banking services are available online, small businesses in rural and extremely remote communities can be more vulnerable to power cuts and loss of signal or internet connection as noted by <a href=\"https:\/\/www.telegraph.co.uk\/news\/2019\/01\/28\/uk-weather-heavy-snow-could-cut-villages-south-east-england\/\" target=\"_blank\" rel=\"noopener noreferrer\">Met Office warnings<\/a> earlier this year. This could cause regular difficulty processing non-cash-based payments.<\/p>\n<p>Access to bank branches is therefore very important for businesses in rural communities. Deploying technology like video banking outside branches, whereby <strong>visitors have access to a teller 24\/7<\/strong> via video link has already seen<strong> success in Portugal<\/strong> for <a href=\"https:\/\/www.aurigaspa.com\/en\/blog-eng\/millennium-bcp-nextgenbank\/\">retail bank Millennium BCP<\/a>, as it allows the bank to continue to serve customers after hours in a cost-effective way.<\/p>\n<p>New software solutions from Auriga are making it easier for banks to provide superior customer service and improve accessibility to the services small businesses need, especially in rural and remote areas.<\/p>\n<p><span style=\"color: #df0000;\"><strong>Challenge<\/strong>:<\/span> Costs of running ATMs\/branches for banks can be high<br \/>\n<span style=\"color: #df0000;\"><strong>Solution<\/strong><\/span>: Shops and supermarkets with the right costs structure behind them could become a revenue stream for businesses already in rural locations<\/p>\n<p>ATMs can be expensive to run, but white label ATMs, machines owned and operated by non-banking organisations, could enable larger businesses, such as shops and supermarkets to generate additional revenue streams in rural locations, as they receive an interchange fee from the bank each time the ATM is used.<\/p>\n<p>\u2018<strong>Super premiums<\/strong>\u2019 \u2013 large payments for operators of free-to-use ATMs that are 1km or more away from the next nearest free-to-use ATM, being introduced by LINK this year, will also incentivise ATM operators not to withdraw cash machines in rural areas.<\/p>\n<p>Offering cashback could also drive higher footfall in rural shops while simultaneously supporting consumers by saving them time and money making a special trip to their closest ATM or bank branch.<\/p>\n<p><span style=\"color: #df0000;\"><strong>Challenge<\/strong><\/span>: Small businesses don\u2019t want to be left with large cash deposits overnight<br \/>\n<span style=\"color: #df0000;\"><strong>Solution<\/strong><\/span>: Business banking hubs<\/p>\n<p>Small businesses that depend on cash usually need to deposit their takings at the end of the working day and on Sundays, after bank branches have finished their own working day. Banking hubs, such as those being <a href=\"https:\/\/www.rbs.com\/rbs\/news\/2019\/03\/natwest--lloyds-bank-and-barclays-pilot-uks-first-business-banki.html\" target=\"_blank\" rel=\"noopener noreferrer\">piloted by NatWest, Lloyds and Barclays<\/a> offer <a href=\"https:\/\/www.thecourier.co.uk\/fp\/news\/local\/perth-kinross\/888047\/calls-for-banking-hub-to-ease-the-sting-of-rural-closures\/\" target=\"_blank\" rel=\"noopener noreferrer\">great ways to tackle this issue<\/a>.<\/p>\n<p>These include longer opening hours than regular branches so SMEs can deposit takings after close of play and cash collect services which allow businesses to schedule cash pick-ups for maximum convenience.<\/p>\n<h2>Banking technology has a key role to play<\/h2>\n<p><strong>The pressure is mounting<\/strong> on small businesses as access to cash declines \u2013 accessibility to financial services is vital to enabling businesses to run smoothly without disruption to sales or operational delays.<\/p>\n<p>Despite the challenges SMEs face, banking technology and innovation in the form of video banking, white label ATMs and business banking hubs will have a key role to play in helping small businesses thrive.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Business Secretary Greg Clark\u2019s recent inaugural Business Council meeting for Small Businesses highlighted that small companies represent an overwhelming majority of the businesses in the UK. Given how important these businesses are for our economy, it\u2019s clear more should be done to enable them to grow. Access to cash and bank branches is vital in<\/p>\n","protected":false},"author":1,"featured_media":44415,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[81],"tags":[],"class_list":["post-43275","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-eng"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The Role of Cash and Bank branches in keeping small Businesses Thriving<\/title>\n<meta name=\"description\" content=\"Why is Cash and Branch Access so Important for Small Businesses? What can be done and How can Technology Help? 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