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Back to business: managing payments safely

As businesses continue to adapt to new operating rhythms, how can they make sure that customer preferences around payment methods are being met?

Last updated: 07 Aug 2020 6 min read

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The coronavirus pandemic has created a number of challenges for small companies, not just in terms of how they operate but also with respect to how they get paid.

As lockdown rules have been eased across the country and non-essential retailers, pubs, restaurants and cafes have been allowed to reopen, business owners are looking at ways to ensure their premises – and their payment methods – carry as little risk of spreading coronavirus as possible.

Is it safe to accept cash?

Early in the pandemic, it was reported that the World Health Organization had advised against the use of cash, telling people that contactless payments were preferable. The WHO has since clarified that it has made no official warning about banknotes: consumers who use cash should simply ensure they wash their hands thoroughly after handling notes, as they should after touching any shared surface. Indeed, the German central bank has said “the probability of contagion with a virus via a banknote is very low in comparison with other surfaces”. Door handles, light switches and shopping baskets are seen as more likely to spread infection.

What you need to know about handling cash safely:

  • Wash your hands thoroughly after touching notes or coins, especially if you’re handling food.
  • Coronavirus on surfaces and objects does not spread by going through the skin, but infection can occur when people touch their faces.
  • You can wear disposable gloves when handling cash, but make sure they are removed – and you wash your hands – before touching food.
  • Surfaces your customers touch – including payment terminals if they are putting in a PIN number – should be disinfected regularly. 

Offering customers choice

The shift towards an increasingly cashless society was already gathering pace in the UK before the pandemic hit. According to UK Finance, only 23% of payments were made with notes or coins in 2019; five years earlier, this figure was 48%. As initial fears around cash handling saw businesses lean increasingly on cashless payment methods, many believe that coronavirus could see this shift accelerated further; however, after an initial sharp slump, ATM withdrawals have picked up, according to the bank’s cash product manager, Lesley Stark.

“Our research shows that ATM withdrawals dropped to 49% of pre-Covid values in April but they increased to 72% of pre-Covid values in June,” says Stark. “So, cash transactions are increasing, albeit we don’t expect them to recover to full pre-Covid volumes.”

While customer payment preferences may be evolving, businesses should make sure they aren’t restricting their ability to accept payments by limiting payment options, says Stark. A recent survey by consultancy Enryo found that 77% of small business owners think it important to offer a choice of payment methods, while 60% consider cash an essential payment option for their customers. As highlighted in 2019’s Access to Cash Review, over eight million adults – many of them vulnerable or elderly – say they aren’t sure how they would cope without cash; continuing to offer suitable payment options to this section of the population is therefore a vital consideration for businesses.

How can businesses efficiently manage their cash?

“It is important to have a safe, secure and flexible cash management process in place,” says Stark. With the potential for further lockdowns presenting further disruption for businesses, there are a number of ways in which you can improve your cash management process.

  • Consider using an on-site intelligent safe: these devices count and validate cash being deposited throughout the day and credit your business account daily, helping to improve cash flow and reducing unnecessary bank visits. 
  • Staffing considerations, as well as reduced banking hours, might mean you are unable to deposit at the bank as frequently as preferred. Businesses should check their cash holding levels with their insurer to make sure they have appropriate coverage for an increased level of cash being held on site.
  • As businesses move out of future lockdown periods, there may be a surge in cash demand, so plan ahead by pre-ordering your cash from your bank or cash-in-transit carrier to avoid any delays or disruption. 

What kind of businesses are introducing new payment methods?

Earlier in the pandemic, payments firm Tyl welcomed many hospitality and retail customers who had adapted their business models to sell online or via takeaway, and who wanted to implement phone- or web-based payment systems.

“Now, small businesses are facing different challenges around the safety of their customers and staff, and even how they take orders,” says Dan Salanson, Tyl’s chief commercial officer. “A lot of pubs and restaurants are moving to a table-service offering or providing an app that allows customers to order remotely. Meanwhile, contactless payment systems mean customers don’t have to handle a terminal so the business doesn’t have to wipe it down constantly.”

“Payments can be a real issue for small businesses like us, especially at the moment when the safety measures needed to protect our staff and customers are of paramount importance” Dan Featherstone, founder, Made For Drink

Sadie Pellow, head of operations at London-based retailer Trotters Childrenswear, says: “We have avoided accepting cash over the past few weeks, with very few customers trying to pay using this method. It will be interesting to see if international card usage increases when tourists begin visiting London again, as in the past they have tended to pay using cash more than domestic customers.”

Dan Featherstone, founder of bar-snack maker Made for Drink, says his business is using technology from a company called Phos, which can turn Android phones into point-of-sale terminals. “Payments can be a real issue for small businesses like us, especially at the moment when the increased safety measures needed to protect our staff and customers are of paramount importance,” he says. “We are observing strict social distancing procedures as per the government guidelines, but are also aware of the declining use of cash during the pandemic, and so technology has helped us to manage our customers’ expectations and payments procedures.”

Salanson adds that the insight into trading patterns provided by card or contactless payment terminals will continue to be an advantage for businesses.

“When a customer uses a card payment, the data goes across the terminal and we can feed that back to the business in insight,” he says. “So we can tell them if they have a repeat customer, if they’ve had a particularly busy day, or what type of customer they have.”

While an increasingly digital society means digital payments systems will doubtless continue to grow in popularity, Salanson says that cash payments and card payments will continue to be offered in tandem to cater for different customer preferences: “For a significant proportion of the population, cash is still their preferred way of paying for things, and contactless payment systems can support that.”

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